Serbian banking sector: Rising opportunities on the horizon

Abstract

SDGD SULYUHGQH DNWLYQRVWL 6',D NDR L RSäWLK SHUIRUPDQVL UHDOQRJ VHN-WRUD SULYUHGH äWR VYH ]DMHGQR LPD XWLFDMD L QD SDG SHUIRUPDQVL EDQNDU-VNRJ VHNWRUD 3RGDFL SRND]XMX GD X SRVWNUL]QLP JRGLQDPD NUHGLWQD DN-WLYQRVW EDQDND EHOHaeL WUHQG XVSRUDYDQMD NDNR X SRJOHGX RELPD DNWLYQR-VWL WDNR L X SRJOHGX UL]LĉQRVWL .OMXĉQH UHĉL UHDOQL VHNWRU SULYUHGH UHFHVLMD VROYHQWQRVW OLNYL-GQRVW NDSLWDOL]RYDQRVW EDQNDUVNRJ VHNWRUD HNRQRPVNL RSRUD-YDN NUHDWRUL HNRQRPVNH SROLWLNH ,QWURGXFWLRQThe global financial crisis, which was not expected to reach such proportions, has led developed market economies into recession. Considering that Serbia is a small economy with a significant share of foreign trade in its GDP, it was only a matter of time when global developments would be reflected in the local economy ("time lag").Owing to good capitalization of the Serbian banking system, the first blow of the global crisis, in the last quarter of 2008, was fended off successfully. During 2009, the banking sector was faced with a lower availability of funds for investment ("cross-border" arrangements declined significantly, and the domestic deposit base was not $EVWUDFW $IWHU WKH ÀUVW ZDYH RI WKH JOREDO FULVLV LQ DQG WKH 6HUELDQ EDQNLQJ VHFWRU UHPDLQHG VWDEOH ODUJHO\ RZLQJ WR WKH SUHVHUYHG YLWDOLW\ RI WKH UHDO VHFWRU RI WKH HFRQRP\ GXH WR D PRGHUDWH UHFRYHU\ RI )', LQ-ÁRZ DV ZHOO DV WKH *RYHUQPHQW·V SURJUDP IRU PLWLJDWLQJ WKH DGYHUVH HIIHFWV RI WKH JOREDO HFRQRPLF FULVLV DLPHG DW VWLPXODWLQJ GRPHVWLF GH-PDQG WKH *'3 JURZWK UDWH DPRXQWHG WR DQG UHVSHFWLYHO\ 'XULQJ WKH HOHFWLRQ \HDU WKH HFRQRP\ ZHQW LQWR UHFHVVLRQ WKH *'3 JURZWK UDWH ZDV LH HFRQRPLF DFWLYLW\ )', DQG WKH RYHUDOO SHUIRUPDQFH RI WKH UHDO VHFWRU RI WKH HFRQRP\ GHFOLQHG ZKLFK FRPEL-QHG KDG DQ LPSDFW RQ D GHFOLQH LQ EDQNLQJ VHFWRU SHUIRUPDQFH 'DWD