Societe Generale Bank to leave Serbia?

The banking sector in Serbia is going through a major consolidation. The sale of Telenor Bank is about to be completed, the state offered Jubmes Bank for sale a few days ago, and there are speculations that Societe Generale Bank is withdrawing not only from Serbia but from the entire region.

Fifteen years ago, banks were in a rush to come to Serbia. Interest was high, clients were regularly servicing their financial commitments and the profit was good too. Ten years ago, there were 28,000 employees in Serbian banks, and today there are 22,000, including executives.

The withdrawal of Societe Generale Bank from Serbia would be quite surprising because the bank came to this market in 1977, and it stayed in Serbia throughout the difficult 1990s. Last year, they announced that they would withdraw from Montenegro. Now, based on the news that appeared on one of the financial sites in Bulgaria, they are preparing to leave not only Serbia and Montenegro, but also Macedonia, Bulgaria and Moldova.

The Bulgarian branch of Societe Generale will be sold in the packages with the bank’s operations in 5 other countries – Albania, Macedonia, Montenegro, Serbia, and Moldova. According to Capital’s article, these markets are oversaturated and unattractive at the moment, which is why the bank is pulling out of them, especially since Societe Generale is not even in the top 3 of those countries.

The PR office of Societe Generale in Serbia says that they do not comment on rumors, refraining from giving further statements.

Also, last year, Societe Generale in Serbia acquired mortgage and cash loan segments from Alpha Bank, as well as a segment of KBC Bank in Serbia.

Dr Branko Zivanovic, professor at the Belgrade Banking Academy, says that the main reason why banks consider withdrawing from a market is poor earnings.

”When the return on the capital is not as expected, when there are a lot of non-performing loans and there are still problems with the usual costs such as commissions, then the profitability of operations in a particular market is also assessed. The banks that would be interested in coming to this market are the ones that come here for their investments and other business interests. Given the current situation, the banks from the former Soviet republics, China or Turkey would be the most interested in coming here”,  he adds.

The Hungarian OTP Bank is one of the banks that could acquire Societe Generale’s operations in Serbia. The bank took over Vojvodjanska Bank last year, and there is a chance that it might acquire another one too.

(SeeBiz, 08.04.2018)

Share this post

scroll to top
Read previous post:
Weekend events in Belgrade and Novi Sad

Air Serbia to also fly from Nis?