In 2022, there are 23 banks in Serbia. The trend of enlargement announces that a dozen larger and several smaller ones will soon remain. The last in a series of acquisitions was the takeover of Credit Agricole by Raiffeisen Bank, Komercijalna and NLB Bank merged, Hungarian OTP bought Societe and Vojvodjanska Bank, Eurobank successfully implemented the process of legal merger of Direktna Bank. Some new acquisitions are also announced.
Now, by providing specialized services, banks are fighting for a position in the market. To what extent does all this affect ordinary users?
The seven largest banks in Serbia now control almost 80 percent of the domestic market. When profits are added up, five banks account for four-fifths of total bank earnings, annually. The reason – low interest rates and digitalization are more suitable for those with more clients. Smaller ones are forced to fight for survival by offering specific services to target clients, RTS writes.
“We are currently in a pilot project that has agreed on temporary and occasional jobs. Over 90 percent of our loans are secured only by personal bills of exchange, and at the same time our loan in our bank is over 2.5 thousand euros,” said Vladimir Vukotic, president of the bank’s executive board.
The world standard is one bank per million inhabitants – there are still many more in Serbia. Two decades ago, there were about a hundred of them, some had their licenses revoked, others got a more powerful owner. Now we also have domestic banks strong enough to buy international ones.
“It is realistic according to the number of users. We also have an oligopolistic market where we have big players, those five or six banks that hold the largest part of the market – 70, 80 percent, and I think the fate of small banks from that angle will be focused on some market ones, which can be interesting and attractive to them, and that is something that exists in the west as a microcredit institution – to be oriented to micro, small enterprises, medium enterprises and to see your perspective there,” explains Zoran Grubišić, professor at the Belgrade Banking Academy.
What does the departure or merger of banks mean for the average user? The National Bank of Serbia claims that it means nothing and that fewer banks will not mean less quality service.
“Any changes in the prices of services, banks are obliged to inform the client in advance and the client agrees to it. So, these status changes certainly do not affect the change in prices of services, and a smaller number of banks, from 23 now, and if there are fewer the market is still competitive and banks have the choice to choose the bank that suits them best,” notes Darko Samenković, gen. Director of the Banking Supervision Department.
In addition to mergers and strategies, banks have a new challenge. Inflation is increasingly threatening the world and pressuring monetary policy to raise key interest rates. For now, the European Central Bank is not deciding on such a move, and it is the same in the region, Mondo reports.
