FYROM: Banks attract second wave of FDI
The financial services sector in the former Yugoslav Republic of Macedonia looks set to remain a magnet for foreign direct investment thanks to growing economic and political stability.
After attracting an initial wave of investment in the 1990s from such institutions as National Bank of Greece and Slovenia’s Nova Ljubljanska Banka, FYROM is now seeing a second wave of entrants in the banking sector as a result of accelerating economic growth and personal incomes as well as the prospect of Nato and EU membership. This year, GDP is forecast to come in at a record 6.5% level, and gross average monthly incomes have passed the €500 level, increasing the bankability of the country’s 2 million-strong population. Consequently, more than two-thirds of banking assets in FYROM are now controlled by foreign shareholders.
Among the latest recruits to the ranks of strategic investors in the banking sector is Icelandic financial group Milestone, which has acquired a 75.9% stake in small regional player Komercijalno Investiciona Banka for €4.4 million. Milestone has had strong ties to FYROM for some time, having previously invested in the pharmaceuticals and wine industries, and continues to explore new investment opportunities in selected industries. "There are ample opportunities in the Macedonian banking sector. With the acquisition of KIB, Milestone confirms its belief in the favourable investment climate in the sector," says Gudmundur Olason, the company’s chief executive.