The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Balkan banking: Time to talk

At the beginning of 2007, Euromoney wrote that the retail lending boom in the Balkans was putting pressure on the region’s banking systems and that cooperation between banks and authorities was vital. But as the world’s economic downturn pushes into southeastern Europe, that warning might be going unheeded. Jethro Wookey reports.

bb-main.gif

THE BALKAN REGION has so far seen little in the way of negative effects from the credit crunch. Growth has remained strong. In Croatia, for example, real GDP growth reached nearly 6%, according to the IMF. This growth was largely the result of surging domestic demand. As income expectations rose in the wake of economic growth, so too did financial activity among consumers. In Serbia, where GDP growth was 7.5% last year, the average net income in 2007 was 19.5% higher than in 2006, according to the National Bank of Serbia (NBS). With the expectations and promises following that country’s national elections in May of this year, employees’ income expectations have not fallen with the downturn in the global economy, especially considering that real net wages growth for the first six months of 2008 was up 4.3% compared with 2007.

The retail lending boom that was in evidence last year was caused partly by this high level of consumer confidence and by the arrival of large foreign banks, which now dominate the region. "Over the last few years, foreign banks have rushed in," says Michael Mueller, chief executive of RZB in Bosnia and Herzegovina.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree