„The banking sector shares the fate of the entire economy, including the society in which it operates. The connection is natural and inevitable. As savings and credit institutions, banks depend on the potential of those who invest money in savings, that is, those who finance some of their needs with loans.
The fight against inflation, which is currently the most current global topic, is being waged by raising interest rates, which in turn affects the operations of banks,“ Marina Papadakis, Secretary General of the Association of Serbian Banks, told „World of Banking and Investments“. She adds that, on the other hand, banks also have a great influence on the economy, „with their stability and liquidity, they support the economic life of the economy and the population.“
Credit activity is growing
“Given that the macroeconomic situation in our country is stable, that the economy achieved a significant positive result, the fact that the banks also achieved a good net result and significant growth in 2022, compared to the previous year, is encouraging,” says Papadakis.
When asked how changes in the reference interest rate of the ECB will further affect lending in Serbia, Papadakis says that the policy of central banks in the world – raising interest rates in order to reduce the availability of money – has contributed to a slowdown in growth or even a decline in real estate prices and the number of transactions.
“Serbia has been an exception until now, because according to the data of the Republic Geodetic Institute, the real estate market in our country has grown in 2022 for the fourth year in a row. In Serbia, a significant number of loans are indexed in the euro currency, and therefore the influence of the policy of the European Central Bank is inevitable. Current data, from the Credit Report for April of this year, say that credit activity is still growing. The total debt due to bank loans at the end of April was 3.5% higher than a year earlier, and 2% higher than the end of the previous month. What the trend will be in the coming period depends on many factors that are not under our influence, and that’s why any forecast is ungrateful,” says Papadakis.
Banks have earned trust
She added that the level of non-performing loans in Serbia is at a historic low (according to the Credit Report for April, it is only 2.9%), and that banks that “managed credit policy and risks well” also contributed to this situation.
Commenting on the current banking crisis in the USA and Switzerland and the shaken trust in banks, Papadakis believes that the figures show that this is not the case in Serbia.
“Clients’ trust in banks is very high, and I would like to add that the banks have well deserved this trust.”
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