Twenty banks are currently operational in Serbia, but the structure of the banking market suggests that consolidation will continue, and the number of banks could be cut in half, according to Forbes Serbia.
Currently, the market is dominated by banks like Banca Intesa, OTP, Raiffeisen, UniCredit, NLB, Poštanska Štedionica, AIK, Erste, and Eurobank.
Gábor Kolić, Director of Acquisitions and Integration at OTP Bank, told Forbes Serbia that the market should consolidate.
“On one hand, Serbia is quite fortunate because it has many banks with a decent market share. From an academic standpoint, it could be seen as a highly competitive market because there are eight to ten major players, which is not the case in other markets where there are fewer dominant participants, and some hold as much as half the market,” Kolić told Forbes.
He noted that even the largest banks in Serbia, including OTP Bank, don’t hold 20 percent of the market share, and that “eight to ten banks will survive.”
Kolić mentioned that the remaining 10 banks “might have to seek opportunities in a narrow, specialized market and will either be acquired or cease to exist.”
“These banks will either retain low profitability or operate at a loss. That’s my sense of the Serbian market. The same is true in some other markets in Central and Eastern Europe,” Kolić emphasized. Although OTP Bank has been very active since 2000, acquiring 25 banks, it has exited the markets of Romania and Slovakia.
“If you’re the tenth-largest and have small profits, the owners will decide to leave the market sooner or later. That’s what happened to us, and it was logical to exit Romania because we held just 2.6 percent of the market, while the top three banks held over 10 percent,” Kolić explained.
In Slovakia, the bank had a market share of 1.7 percent, while three banks dominated. According to him, the market became unfavorable for small and medium-sized banks, and the bank’s management saw no opportunity to catch up, so the decision was made to exit.
Kolić highlighted that there are several parameters that can help identify which countries might be attractive for new banks to enter, primarily through acquisitions.
One of these indicators, he said, is the country’s economic growth, and what acquiring banks aim for is to enter the top three on the market.
Kolić stated that this is also OTP’s goal and explained why it doesn’t operate in some smaller markets, such as Bosnia and Herzegovina, North Macedonia, or the market of Kosovo and Metohija.
(Kamatica, 21.10.2024)
https://www.kamatica.com/analiza/broj-banaka-u-srbiji-ce-biti-prepolovljen/72835
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Publish date : 2024-10-22 01:49:00
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