Transformation of the Serbian banking system: Twenty years later

Abstract

The aim of this paper is to present the changes that have occurred in the banking sector of Serbia after the beginning of its transformation, with special emphasis to the last decade of development. Twenty years after the beginning of the transformation, the fundamental features of the system are consolidation, foreign ownership, increases of all banking aggregates measured by absolute values, primarily assets, capital, deposits and loans. Also, a trend of growth in profitability, liquidity and capital adequacy of the sector was recorded. Along with the decrease in the number of banks, the ownership structure changed to predominantly foreign capital, but the degree of concentration did not change drastically. However, the share of the first 5 banks in total assets was constantly above 50%, which indicates the fact that the banking sector of Serbia is extremely fragmented, because there is a significant number of banks with a market share below 2%.

Keywords

• banking sector
• serbia
• transformation
• internationalization
• performances