There are currently 20 banks operating in Serbia, but ongoing market trends suggest that consolidation will likely reduce this number significantly, potentially halving it, according to Forbes Serbia.
The dominant players in the market include Inteza, OTP, Raiffeisen, Unikredit, NLB, Poštanska štedionica, AIK, Erste and Eurobanka.
Gabor Kolić, the Director of the Directorate for Acquisitions and Integration at OTP Bank, noted that market consolidation is necessary. He emphasized that while Serbia is fortunate to have many banks with substantial market shares, the competition is high, with eight to ten major players. In contrast, other markets often feature fewer dominant banks that control a significant portion of the market.
Kolić pointed out that even the largest banks in Serbia do not command a market share of 20%, and he predicts that only “eight to ten banks will survive” the impending consolidation. He warned that the other ten banks may need to carve out a niche in specialized markets or risk being acquired or exiting the market altogether.
He expressed concerns that these smaller banks would struggle with low profitability or face losses, a situation mirrored in some Central and Eastern European markets. OTP Bank, despite its active acquisition strategy since 2000, has exited the Romanian and Slovakian markets due to limited market share.
Kolić explained that if a bank finds itself ranked tenth with minimal profits, the owners will eventually opt to exit the market. He cited OTP’s decision to leave Romania, where it held just 2.6% market share compared to leading banks with over 10%. In Slovakia, OTP had only a 1.7% share, which made the market unviable for small to medium-sized banks.
He indicated that several factors can signal potential opportunities for new banks entering markets, primarily through acquisitions. Economic growth is a crucial indicator, and banks typically aim to position themselves among the top three players in their markets.
Kolić confirmed that OTP shares this goal, which is why it has chosen not to enter smaller markets like Bosnia and Herzegovina and North Macedonia.
