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English   Srpski  Home page > News archives > ASB Assembly Session

ANNUAL ASB ASSEMBLY SESSION: BANKING SECTOR AND ASSOCIATION OF SERBIAN BANKS IN 2016


The Annual Assembly Session of the Association of Serbian Banks was held on 26 April 2017. The Assembly Session was opened by Dr Goran Pitić, President of the ASB Board of Directors, and President of Societe Generale Bank Serbia a.d. Belgrade Board of Directors, who thanked the ASB departments, committees and Secretary General for the successful cooperation with the banks, and appointed the representatives of banks into the Assembly’s working bodies.

The Annual Assembly Session was opened by Dr Goran Pitić, President of the ASB Board of Directors,
and CEO of Societe Generale Bank Serbia a.d. Belgrade

Appointed into the Working Chairmaship were Predrag Mihajlović, OTP Bank a.d. Novi Sad, Alen Dobrić, UniCredit Bank a.d. Belgrade, and Predrag Janković, Eurobank a.d. Belgrade. Appointed as the minutes verifiers were Dragica Mihajlović, Banca Intesa a.d. Belgrade, and Savo Petrović, Komercijalna banka a.d. Belgrade.

Working Chairmanship: Alen Dobrić, UniCredit Bank a.d. Belgrade, Predrag Mihajlović, OTP Bank a.d. Novi Sad,
and Predrag Janković, Eurobank a.d. Belgrade

Following the appointment of working bodies, the Working Chairmanship, the minutes-keeper and the minutes verifiers, the audience was addressed by Dr Veroljub Dugalić, ASB Secretary General. In his introductory address, he briefly presented the banking sector of Serbia and its results in 2016.


Address by Dr Dugalić, ASB Secretary General


At the beginning of his address, Dr Dugalić presented the basic indicators of macroeconomic trends in the country from 2008 to 2016, and the interest rates (benchmark interest rate, BEONIA, BELIBOR and the average aggregate weighted interest rate on securities whereby the NBS performs open-market operations). At the end of December 2013 the benchmark interest rate amounted to 9.5%, whereas in the same period of 2016 it amounted to 4%. The average aggregate weighted interest rate on securities in 2013 amounted to 8%, and three years later to 2.89%. The average weighted interest rates on total loans and deposits in the banking sector of Serbia were in this presentation presented for the period ranging from December 2011 to December 2016.

Total loans at the end of 2016 amounted to RSD 1,908,842 million or EUR 15,460 million. At the end of 2016 total bank loans recorded a nominal (1%) and real (2%) decline compared to the end of the previous year. Corporate loans recorded a nominal growth by 1%, i.e. a real drop by 1% compared to the end of 2015. In the same period retail loans recorded a slight nominal growth by 9%, i.e. a real growth by 7%.

Total granted loans in the banking sector of Serbia recorded a decline in 2016 in relation to 31 December 2014 and 2015. In 2014 they reached RSD 2,015,951 million, i.e. EUR 16,666 million, whereas in 2016 they amounted to RSD 1,908,842 million, i.e. EUR 15,460 million. In 2014 NPLs amounted to RSD 419,726 million, i.e. EUR 3,470 million, which means that the NPLs accounted for 20.82% of total loans. In 2016 the non-performing loans dropped to RSD 328,991 million, i.e. EUR 2,664 million, thus accounting for 17.24% of total loans.

Dr Veroljub Dugalić, ASB Secretary General, delivered a presentation about the banking sector of Serbia and the ASB activities in 2016

Capital adequacy ratio at the end of 2016 amounted to 21.2% (in 2015 it was 20.9%), and is still assessed as very sound, bearing in mind the growth in the banks’ exposure to the credit and market risks and the fact that it remains high above the prescribed minimum.

The banking sector of Serbia at the end of 2016 recorded a positive financial result. The recorded profit before taxes amounts to RSD 21,302 million, i.e. EUR 172 million. The increased positive result in the balance sheet of the banking sector of Serbia at the end of 2016, compared to the end of 2015, was significantly influenced by the operational, organizational and financial restructuring of a number of banks, which was reflected in the reduced operating costs. The interest income, although lower than at the end of the previous year, covered all business expenditures.

In the second part of his address, presenting the business results of the banking sector of Serbia, Dr Dugalić resorted to a comparison with the results achieved by the neighboring countries:

  • Capital adequacy in the banking sector of Serbia in 2016 amounted to 21.5% (in 2014 it was 20%), in Croatia 21.9% (21.8%), in Bosnia and Herzegovina 15.8% (16.3%), in Slovenia 19% (18%), in Hungary 16.8% (16.9%), in Slovakia 17.3% (17.3%) and in Romania 19.1% (17.6%).
  • NPL ratio in 2016: in Serbia 17.2% (in 2014 it was 21.5%), in Croatia 15.9% (16.7%), in Bosnia and Herzegovina 12.1% (14.2%), in Slovenia 8% (11.7%), in Hungary 10% (15.6%), in Slovakia 4.8% (5.3%) and in Romania 11.3% (13.9%).
  • Rate of return on equity (ROE): in Serbia 3.3% (in 2014 it was 0.6%), in Croatia 3.3% (5%), in Bosnia and Herzegovina 5.6% (5.2%), in Slovenia 11.9% (-1.9%), in Hungary 19.2% (-20.6%), in Slovakia 14.8% (10.4%) and in Romania 12.3% (-12.5%).

In addition to these business indicators, Dr Dugalić presented a comparative review of the trends in retail and corporate loans and a comparative review of the trends in total loans and total retail and corporate deposits in Serbia and the above listed countries in 2016/2015. Moreover, he presented the macroeconomic indicators for the Southeastern Europe at the end of 2016.

Dr Dugalić ended his presentation by briefly referring to the activities conducted by the Association of Serbian Banks in 2016, including: banking operations with domestic legal entities (i.e. corporate banking), foreign operations, compliance function, international cooperation, financial markets development, Bank Training Centre, retail operations, Credit Bureau, legal operations, financial reporting and implementation of fiscal regulations in banking, IT, payment system and Bank Clearing Institution, marketing, PR and publishing activities, digital operations and IT system security.

What also speaks volumes about the ASB operations is the presented Independent Auditor’s Report which underlines that the Financial Report of the Association of Serbian Banks, in all its materially significant aspects, truthfully and objectively presents the financial position of the Association, business results and cash flows as of 31.12.2016, in accordance with the accounting regulations of the Republic of Serbia, based on the Law on Accounting and Accounting Policies.

At the end of his address, Dr Dugalić emphasized that the contributions by the ASB member banks account for 2.5% in the total revenues of the Association of Serbian Banks in 2016, as a result of the continuously decreasing trend of this source of revenues in the past 14 years. This is best illustrated by the fact that back in 2003 the contributions by member banks accounted for 87% of the ASB total revenues.


Address by Dragana Stanić, Head of the NBS Payment System Department


On behalf of the National Bank of Serbia, the audience was addressed by Dragana Stanić, Head of the NBS Payment System Department:

"Mr Dugalić, dear colleagues, allow me to greet you on behalf of the Governor and convey her apology for not being here today for some justified reasons.

It is our pleasure to underline the excellent cooperation with the Association of Serbian Banks and its committees concerning the various issues, one of which has been addressed today – an issue quite popularized by the social networks – i.e. the automated processing of foreign inflows of small monetary value, and the submission of data in respect of such inflows.

Dragana Stanić, Head of the NBS Payment System Department

When it comes to the NBS priorities which are significant for you, I would like to single out the payment system, as one of the financial market segments which has changed at the global level in the past twenty years in a fascinating, almost surreal way. We have faced the swift technological advancement, the growing needs of the clients, innovative services, new players in the fintech field, IT and internet giants in payment services, the necessity for 24/7/365 payments, accessible from all locations and with the smallest possible number of clicks. In line with that, one of the systemic issues that the NBS has been working on are the so-called instant payments. In brief, those are the payments in which the transmission of the payment message and the availability of funds to the payment recipient occur in real time on the 24/7/365 basis. In other words, instantly available funds and permanently accessible services. This is an amazing opportunity for banks when it comes to using the potential of mobile phones as multifunctional gadgets which are almost constantly nearby their users, and which can launch a genuine revolution in payment services both in M-banking at the real sales points, and in online payments.

Another global trend is the increasingly frequent introduction of national card schemes, as counterparts to the expensive international card brands, especially if we take into account that, on average, about 95% of payments gets effected in the country. Therefore, our focus will be on DINA card, as the most cost-effective card by far. In cooperation with the interested banks, these days we have been working intensively on its online release, and a few days ago we received some great news – the Governor of the Bank of China positively responded to the initiative of the NBS Governor concerning the launch of a joint product with China Union Pay, the quickest growing and most used card in the world, accepted all over the globe. I use this opportunity to kindly ask you to pay attention to DINA – we often hear the banks saying that, despite the substantial incentives on the part of the competitive brands, DINA card has proven to be most profitable for them already in the medium term.

From the EU we have the pending innovations: the adopted PSD 2, written in light of the technological innovations and the growing electronic and mobile payments, and introducing 2 new types of payment institutions, i.e. a payment initiation service provider and an account information service provider. Both of these institutions have the right to access the client’s bank account if the client previously provides the relevant consent, and the bank is obliged to enable this.

Finally, there are other, always important goals: cyber security and fraud prevention, efficient competition, consumer protection, financial inclusion, i.e. the high distribution and accessibility of payment solutions, research and statistics. We will be working on all of these aspects together, for the benefit of our country and all of us."

A detail from the ASB Assembly Session

At the ASB Assembly Session, the members unanimously adopted the Minutes from the ASB Assembly Session held on 28.04.2016, the Analysis of Financial Position and Financial Result of the Banking Sector of Serbia in 2016, the Report on Operations of the Association of Serbian Banks in 2016, with the Financial Report, and Auditor’s Report, the Decision on the Allocation of the Financial Result in 2016, and the Program of Activities of the Association of Serbian Banks with the Financial Plan for 2017.

The Session was attended by numerous representatives of banks and other institutions, such as: the National Bank of Serbia, the Administration for the Prevention of Money Laundering, the Tax Administration, ASSECO, BDO, IEF, etc.

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