Bosnia’s bank assets increase 5.1% y/y to EUR 12bn at end-2013

By bne IntelliNews February 4, 2014

Bosnia’s commercial banks assets rose 5.1% y/y to BAM 23.5bn (EUR 12.0bn) at end-December 2013, quickening from a 4.2% y/y increase the month before underpinned by a stronger lending activity, central bank (CBBH) data showed. The assets accounted for 89.2% of the full-year GDP forecast, up from 87.0% a year ago, according to IntelliNews calculations.

Bank loans went up 2.9% y/y to BAM 16.4bn at end-December, speeding up from a 2.2% y/y rise at end-November, thanks to both higher household and corporate loans. The average monthly lending growth, however, slowed to 2.8% in 2013 from 4.9% the year before due to slower increase of retail lending, while corporate lending growth strengthened slightly over the period.

Retail loans, rose 3.9% y/y to BAM 7.1bn at end-December, accelerating from a 3.5% annual increase the month before. Credits to companies grew 1.6% y/y to BAM 8.4bn at end-December after inching up 0.9% y/y at end-November.

Bosnia’s commercial banks' reserves, including cash in banks’ vaults and deposits with the central bank, climbed 114.0% y/y to BAM 3.8bn at end-December, easing from a 19.3% y/y hike a month earlier. Their share in total banking sector assets grew to 16.4% as of end-December from 15.1% a year ago.

Credit supply remains constrained by the high level of NPLs which stood at nearly 15% at end-September 2013, up from 12.7% a year ago. In order to spur lending activity, Bosnia plans to create the legal framework for the sale of the bad loans so that banks can clear their balances and remain with the healthy part that could provide support to the real sector, central bank governor Kemal Kozaric told IntelliNews earlier in January.

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