It is expected that experts say that 29 banks are too much for a country whose gross domestic product last year was less than 37 billion euros. However, it is unexpected because earlier banks have already bought existing domestic banks, and recently foreign-owned banks are buying domestic businessmen.
Miodrag Kostić, who in the meantime became 100-year-old owner of AIK Bank, withdrew for the first takeover of Alpha Bank.
Last year, AIK Bank was the first in Serbia to earn a net profit of EUR 118 million, a quarter of a billion-euro capital base, and the sixth to total loans totaling nearly EUR 1.8 billion.
New players in this market are Andrej Jovanovic and Bojan Milovanovic, who first purchased the Serbian credit union Maribor, changed their name to a direct bank and then bought "Pireus" and "Findomestik Bank".
Before entering Piraeus, at the end of 2017, the direct bank was the tenth in terms of EUR 16 million, and on 19th place after the share of total assets of 0.8 percent (Piraeus Bank's share was 1.5 percent) on a capital of EUR 33 million, while the capital of Piraeus Bank is three times higher, EUR 108 million.
Many people probably do not even remember that more than 80 banks in Serbia had been active two decades ago, almost all of them with domestic capital. Already in 2004, the number fell to 47, and this trend continued, although new "players", such as Bank of China or Mira Bank from the United Arab Emirates, came in the meantime.
In professional circles, there is almost consensus that there is still a tightening of the Serbian banking market, because banks with a market share of less than two percent can not survive in all the harder games.
There are currently 14 banks with a market share of less than 1.5 percent. All of them approved only 7.5% of total loans, while the share of the six largest banks, Intesa, Komercijalna banka, Unnikredita, Societe Generale, Raiffeisen and AIK was eight times higher – 62.2%.
Almost everyone in the big sixths has a larger stake than 14 small banks together. That is why economic journalist Miško Brkic recalled the strength of the Serbian banking market that reminded of six "Guliver" and "Liliputans".
He is convinced that in the foreseeable future some of the existing banks will be the aim of the takeover. After all, Finance Minister Sinisa Mali has already announced that the state plans to sell its stake in next year's Jubmes bank and commercial by the end of this year, and a strategy for the Serbian bank is being prepared. In addition, for months, the public speculated on who could buy a Societe Generale bank because this French group had already withdrawn from the Croatian market.
"I'm not sure she will be able to survive ten long-term banks with a market share of less than 0.4 percent, of which even six last year ends with a net loss, as long as shareholders still have patience to cover those minuses. For all this I would not be surprised if the balance of power in the banking sector has changed dramatically in the foreseeable future, but before something similar happens in other countries, "Brkić said.
In favor of this thesis there is a low degree of concentration on the Serbian market. In Croatia, the four largest banks account for almost 70% of total assets, and in Serbia, the four largest banks have approved about 47% of all loans. Therefore, Ivan Nikolic, Governor of the National Bank of Serbia, considered that consolidation was not only expected but also desirable.
"This is a positive process as it will increase efficiency and strengthen competition among banks, and this will bring benefits to customers, as this will facilitate the loans," said Nikolic, who recently told the Beta agency that he saw no problem in the fact that banks are buying homemade investors. Before that, says NBS Council member, "Experience has shown that foreign owners are not always successful".
In the group of the six largest companies, there are currently only two banks with majority domestic capital, Komercijalna and AIK Bank, with the former "book" saving only one letter because the state is already looking for a buyer for the Commercial Bank.
If you look at business results for 2017, the largest amount of money to buy new banks has AIK Bank, which posted a net profit of 118 million euros last year. In addition, Miodrag Kostic has already shown clear intentions of further expansion in Serbia and the region.
He is practically the only businessman from Serbia who has in some way entered the EU as co-owner of the Gorenjska Bank. Therefore, it is now possible for the AIK Bank's customers to offer additional benefits and facilitate their business with EU partners and through the bank in Slovenia.
The approval of the European and Slovenian central banks to buy a majority stake in the Kenyan Bank of Gorenjska is a confirmation of the highest place in which its AIK capital is strong, stable and liquid, which are the features that savings accounts are increasingly taking into account, especially as interest rate rates at the historically lowest level.