The report on the operations of financial institutions shows that the majority achieved positive results in 2022. The Agency for Economic Registers (APR) states that banks, as the main carriers of the financial system, achieved a positive result of about 87.77 billion dinars, which is an annual growth of 77.9 percent.
Economist Aleksandar Stevanović, commenting on the positive results of banks said that the banking system in Serbia has begun to resemble those in Western countries, at least when it comes to commercial banking.
“Serbian banks follow all the rules followed by the top commercial banks, starting with what is required according to Basel 1-3, through central bank regulations that are more or less similar, and ending with the ways of risk management,” our interlocutor points out. He adds that the old diseases of domestic banking, where loans are given that are known to not be repaid, have been eradicated.
“The percentage of non-performing loans (NPL) has decreased and is at a level similar to that of Western countries, after the first wave of the struggle for a hungry market and chasing clients in a relaxed, not to say dissolute, manner passed in the early 2010s. Not to be praised, Serbian banks through cost cutting have created systems that, with all the IT, have become cumbersome, where the small client is almost irrelevant, where most employees are poorly paid compared to other branches for a similar job, so the level of service is also mediocre”, assesses Stevanović.
However, what is most important is that even in times of crisis, such as the pandemic and the subsequent Ukrainian crisis, the domestic banking system remained stable.
“Our banking system is becoming established, sometimes sluggish, conservative, but also safe, and that is the most important thing of all. It’s hard to love him, but it’s equally hard not to respect the results he achieves. The banking system makes profits even in years that are quite turbulent, and profits are a sign that they know how to recognize what are good placements and that they know where to finance those placements,” says Stevanović.
When it comes to the near future of bank operations, our interlocutor believes that not much will change.
“We can expect even more of the same in the coming period. Banks will remain a conservative partner of the economy and the population that knows how to make money in that partnership, and it is to be expected that anyone who does not like everything in the banking sector will seek happiness in financing through other participants in the financial market, such as those who are already in Serbia or are available, as well as through new ones that will appear”, concludes Stevanović.
According to the APR report, other financial institutions also recorded positive results in the previous year. In the insurance sector, a total profit of 8.2 billion dinars was realized, which was reduced by 26.1 percent, and the decrease in the positive result of the period was also recorded in the leasing market, where 12 providers of financial leasing generated a profit of 1.04 billion dinars, which is lower by 14.4 percent compared to 2021, while the number of employees has only slightly decreased.
Operating on a shallow and still small capital market, broker-dealer companies achieved a positive net result, which decreased by 52.9 percent compared to the previous year.
Voluntary pension fund management companies made a total profit of 203 million dinars, which was reduced by 12.3 percent, while the number of employees remained almost at the level of the previous year.
Negative result of investment fund management companies
Companies for the management of investment funds moved into the sphere of negative results, realizing a loss in the amount of eight million dinars, whereby one company operated more than in 2021.
“Voluntary pension funds (seven in total) and open investment funds with public offering, whose assets were managed by the mentioned companies, also recorded negative results,” APR stated.
