Serbian banking system increasingly resembles the Western European one

The report on the operations of financial institutions shows that the majority achieved positive results in 2022. The Business Registers Agency (APR) states that banks, as the foundation of the financial system, generated 87.77 billion dinars of revenue, which is an annual growth of 77.9 percent.

 Commenting on these positive results, economist Aleksandar Stevanović says that the banking system in Serbia has begun to resemble the ones in Western countries, at least when it comes to commercial banking.

“Serbian banks follow the same rules as the top commercial banks, starting with what is required according to Basel 1-3, through central bank regulations that are more or less similar, and ending with risk management,” Stevanović points out.

He adds that the old diseases of domestic banking, where loans were granted despite the bank knowing there is a high risk they won’t be repaid, is a thing of the past.

“The percentage of non-performing loans (NPL) has decreased and is at a level similar to that of Western countries, after the first wave of fighting for clients passed in the early 2010s. Thanks to cost-cutting, Serbian banks have created systems that, have become cumbersome, where the small client is almost irrelevant, where most employees are poorly paid compared to other branches for a similar job and where the level of service is also mediocre”, assesses Stevanović.

However, what is most important is that even in times of crisis, such as the pandemic and the subsequent Ukrainian crisis, the domestic banking system remained stable.

“Our banking system is sometimes sluggish and conservative, but also safe and that is the most important thing of all. Our banking system made profits even during turbulent years and profit is a sign that they know how to recognize what are good placements and that they know how to finance those placements,” says Stevanović.

“We can expect even more of the same in the coming period. Banks will remain a conservative partner to businesses and the population,” Stevanović concludes.

(, 31.07.2023)

This post is also available in: Italiano

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