THE BATTLE LINES are being drawn up in Belgrade this spring. Like ranks of lances each adorned with the badge of its liege lord, rows of lampposts all around the city are decorated with the logos of Serbia’s competing financial institutions. The battle of the banks is about to begin in earnest.
At stake is a share in one of Europe’s fastest-growing banking industries. Measured in euros, banking assets in Serbia grew by 44% last year, following 22% growth in 2004. However, in absolute terms, at €8.9 billion, total assets were the equivalent of only 44% of GDP at the end of 2005.
“The overall size is still very limited,” says Oliver Roegl, chairman of the managing board at Raiffeisen in Belgrade. “The banking sector is still in its starting phase. And with an economy that is growing 4%, 5%, 6%, the long-term potential for the banking sector is very strong.”
Damir Novotny, managing director of T&MC in Zagreb and a consultant to Serbian banks, agrees. “The market will for sure grow by 20% annually for the next five years,” he says. In particular, he expects growth in the retail sector, which is underweight in Serbia compared with other countries in the region.