Number of banks in Serbia might halve – New acquisitions to follow in domestic financial market

There are 20 banks operating in Serbia, but the structure of the banking market points to further consolidation and that number might halve, Forbes Serbia reports. At the moment, the dominant banks are Intesa, OTP, Raiffeisen, UniCredit, NLB, Postanska stedionica, AIK, Erste and Eurobank.

The director of the directorate for acquisitions and integration at OTP Bank, Gabor Kolic, estimated that the market in Serbia should consolidate.

– On one hand, Serbia is very lucky to have plenty of banks with a decent market share. From an academic point of view, it could be assessed as a market with a very big competition, because there are eight to 10 big players there, which is not the case in other markets, where there are fewer dominant participants, and some even hold a half of the market – Kolic said for Forbes.

He said that, in Serbia, not even the biggest banks have a 20% market share, not even OTP Bank, and that “eight to 10 banks will survive.”

Kolic said that the remaining 10 banks “might have to seek their opportunity in some narrow, specialized market” and that “they will either be bought or stop existing.”

– Those banks will either keep the low profitability or suffer losses. That is my feeling regarding the market of Serbia. It’s the same in some other markets in central and eastern Europe – pointed out Kolic.

OTP Bank, although it was very active from 2000 and bought 25 banks, has left the markets of Romania and Slovakia.

– If you are tenths and have a small profit, the owners will decide to exit the market, sooner or later. It has happened to us too and it was logical to leave Romania, because we had 2.6% of the market, whereas the first three banks had over 10% - explained Kolic.

In Slovakia, that bank, he said, had a share of 1.7%, whereas three banks were dominant. That market, according to him, had become bad for small and medium banks and the bank’s management saw no chance of catching up with them, so the decision to leave the market was made.

Kolic said that several parameters showed which countries could be interesting to new banks to enter, primarily through acquisitions.

One of those indicators, he said, is the country’s economic growth, and what the banks-purchasers strive to do is to enter the top 3 in the market.

Kolic said that it was also OTP’s goal and that, because of that, it didn’t operate in certain smaller markets – Bosnia and Herzegovina, North Macedonia and Kosovo.

Banca Intesa a.d. Beograd

OTP banka Srbija a.d. Novi Sad

Raiffeisen banka a.d. Beograd

UniCredit Bank Srbija a.d. Beograd

NLB Banka a.d. Beograd

Banka Poštanska štedionica a.d. Beograd

AIK Banka a.d. Beograd

Erste Bank a.d. Novi Sad

Eurobank Direktna a.d. Beograd

Intesa

OTP

Raiffeisen

UniCredit

NLB

Postanska stedionica

AIK

Erste

Eurobank

Gabor Kolić