Serbia's banking system assets drop 1% y/y to EUR 34bn at end-May 2013 as lending contracts

By bne IntelliNews June 27, 2013

The consolidated assets held by Serbian banks fell 1% y/y to RSD 3,896bn (EUR 34bn) at end-May after inching up 2% y/y at end-April, dragged down by falling corporate lending, central bank data showed. The ratio of bank assets to full-year GDP retreated to 104% at end-May from 116% a year earlier and 122.1% at end-2012.

Domestic credit, which makes up 56% of the banking sector assets, shrank 2.4% y/y to RSD 2,178bn, after increasing 1.7% in April due to falling corporate lending while retail loans stagnated.

Loans to companies fell 7.1% y/y to RSD 1,051bn in May for a second straight month as budgetary funds earmarked for subsidised loans have been spent in the first quarter of the year. Loans to households recorded 0.0% y/y growth to RSD 655bn.

Loans to the government sector, which have been recording double-digit growth rates in annual terms since March 2012, rose 12.2% y/y to 282bn in May, braking from the 24.2% increase the month before.

Serbia’s credit growth could benefit from more accommodative monetary policy as inflationary pressures are expected to cool in H2. In June, the central bank (NBS) cut its one-week key repo rate by 25bps to 11%, sustaining its monetary easing stance for the second straight month.

However, further monetary policy easing will depend on the local dinar currency stabilization. The dinar lost 3.1% m/m and 0.7% ytd against the euro as of June 25, amid investors’ concerns over rising fiscal imbalances.

Related Articles

Russia keeps Serbia waiting for promised MIGs

Russia plans to deliver six used MIG 29 aircraft to Serbia by end-2017, Russia’s Federal Service for Military-Technical Cooperation (FSMTC) Director Dmitry Shugaev said on July 19, Sputnik ... more

Fiat workers end 3-week strike that halted production at Serbia's top exporter

Production at the Fiat Chrysler Automobiles (FCA) Srbija factory in Kragujevac will restart on July 19 after workers and Prime Minister Ana Brnabic agreed on the evening of July 18 to end ... more

Evolution Equity Partners closes $125mn cybersecurity-focused fund

Evolution Equity Partners announced on 17 July the final closing of a new fund with total capital commitments of $125mn to make investments in cybersecurity and next generation enterprise software ... more

Dismiss