While information has been circulating in the largest European economies in recent days, so that after the blow to the real sector, it could now be financially hit, domestic official institutions are not pessimistic. The NBS told “Blic Business” that the banking sector in Serbia is ready to face the upcoming challenges, but also that it will carefully monitor how banks in Serbia work.
The other day, he was surprised by the announcement of the German regulator, which almost openly said that the banks are now under attack.
“German banks should prepare for a sudden rise in insolvency. The reason is that the corona crisis is pushing weaker companies to the brink and jeopardizing the growth of real estate values in the country. The sharp economic downturn reinforces fears that the number of insolvent companies will increase significantly in the coming quarters,” warned the Bundesbank in its annual report on financial stability, estimating that the growth of insolvency will be higher in the manufacturing sector than in services and construction.
As she added, the increase in unemployment and the number of insolvencies of households could also result in an increase in non-payment of debts on the basis of housing loans.
On the other hand, there are no such predictions from the Serbian central bank, but there is concrete information on the current state of the banking sector, as well as on the future moves of the NBS, led by Governor Jorgovanka Tabakovic.
“Serbia’s banking sector has welcomed the global economic crisis as highly liquid, well-capitalized and with the lowest level of problem loans since the indicator was monitored in the Republic of Serbia. It is ready to face upcoming challenges and support economic measures,” the NBS said for “Blic Business.”
In Serbia, the level of problem loans at the end of August 2020 was reduced to 3.5 percent, which is the lowest level ever reached since the introduction of this indicator. A decrease in the level of non-performing loans granted to the economy was recorded in all sectors.
When asked whether the level of non-performing loans should be expected to increase now, which is the expectation for many developed European economies, the NBS said that “the synergistic effect of a series of measures is expected to prevent an increase in loan repayment delays impact on the quality of banks’ assets.”
In addition to stating that they continuously monitor the situation in the financial sector, as well as the situation on the entire domestic and international market, by taking the necessary measures in the NBS, they announce and give control to banks.
“In the coming period, the National Bank of Serbia will carefully monitor possible changes in the quality of banks’ portfolios and will take further activities in order to prevent the effects of the crisis on the banking sector,” the NBS assessed.
It should be reminded that, in addition to delays in repayment of liabilities, banks and clients are provided with other facilities in loan repayment (such as the possibility of refinancing or changing the maturity date of the last installments of consumer, cash and other loans, as well as the possibility of extending housing loans). regulatory preconditions for easier access to finance for citizens (such as easier access to housing loans).
“That confidence in the banking system has been preserved can be seen through the growth of household savings, the importance of which is especially evident in the conditions of growing uncertainty due to the pandemic,” the NBS concluded, Blic Business reports.
