Banking has been a strong and profitable industry in Serbia for years. Back in the day, they were the most desirable employers because of their high salaries. Over time, however, much has changed: from the number of banks to the number of workers to the total change in business strategy. Profit, however, had been growing until it suffered a serious blow in 2020 due to the pandemic.
In the last ten years, the number of banks in Serbia was reduced from 33 to 26, the number of employees by 6,405 and the number of branches by 800 or almost a third. At the same time, the profit of the banking sector has increased 30 times since 2011, deposits have doubled to 29 billion euro and the number of granted loans has increased almost five times.
Last year the pandemic left a mark on corporate results, as banks made a pre-tax profit of 391.5 million euro, which is significantly lower than the profit in 2019 when they earned 575.5 million euro.
However, the upward trend is evident if we take into account that banks in 2011 had made a profit of “only” 12 million euro.
Experts estimate that these figures show to some extent the accelerated transformation of the banking sector, as well as the effects of digitalization in all areas, which was expedited by the pandemic.
Last year was difficult for the entire economy, including the financial sector. However, in the banking sector in Serbia, the number of employees in 2020 decreased by 264 compared to a year earlier. On the other hand, if we compare the situation 10 years ago to today, there are 6,405 fewer employees in this sector than in 2011.
Furthermore, the number of branches has decreased by almost a third and working hours are being reduced to one shift. This means that banks are open only by 4 or 5 pm, which is a big problem for many customers who work.
At the same time, the banks’ profit (before taxes) has increased more than 30 times, from €12 million in 2011 to €391.5 million in 2020.
“The decrease in the number of employees, including the number of branches, is a consequence of new trends in banking. Electronic and mobile banking is increasingly present and the situation with the virus has accelerated these trends, which are mainly related to the automation of certain processes. In the world, there is a particularly present development in the field of fintech banking, from payments to fully digitized online banks, so the classical banks had to react to this,” explains Dejan Erić, professor at the Belgrade Banking Academy.
He adds that in parallel with the digitization trend, the number of banks in Serbia has decreased due to acquisitions, mergers and other reasons, and reminds that this is generally a trend in the world.
The consolidation of the banking sector has been going on for some time in the Serbian market and analysts claim that this trend will continue in the following period. The figures speak for themselves: while in 2011 there were 33 banks operating in Serbia, today there are 26 on the market.
“Consolidation of the banking sector is a global trend: mergers, acquisitions and digitalization have contributed to this. Things are no different in our country. We had a partial consolidation in the past period and I don’t expect any new developments in this matter in the next year or two,” underlines Professor Eric.
(Kamatica, 04.03.2021)
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