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Raiffaisenbank, Hypo Alpe-Adria-Bank Strongly Expand Share In 2005

Raiffeisenbank of Serbia continued its impressive performance last year and managed to boost its assets by 72.6% over last year and 25.2% above last quarter to CSD119.4 billion (US$1.67 billion) at the end of 2005, figures released by the National Bank of Serbia reveal.

Raiffeisenbank of Serbia continued its impressive performance last year, and managed to boost its assets by 72.6% over last year and 25.2% above last quarter to CSD119.4 billion (US$1.67 billion) at the end of 2005, figures released by the National Bank of Serbia reveal. The lender expanded its market share to 15.4% at the end of the year, up from 13.6% at the end of 2004. Its main competitor, Bance Intesa (the former Delta banka) retained its 10.6% share last year after recording an almost 50% surge in assets. The third position is occupied by state-owned Komercijalna banka (9.6% market share), which may soon seriously challenge Banca Intesa through a capital boost in a deal estimated at US$84.2 million.

However, Hypo Alpe-Adria Bank recorded the most impressive performance last year. As a result of its strong expansionistic strategy, the lender increased its assets by 140% y/y to CSD68.1 billion (US$958.8 million) as of Dec. 31. Hypo Alpe-Adria reported more than fourfold asset growth in 2004, but from a very low base. The ambitious plans of the lender, which increased its market share by 3.2 percentage points y/y to 8.8% at the end of 2005, were confirmed by the recent entry in the Montenegrin banking sector. HVB banka also recorded very strong growth last year and managed to become the fifth largest in the country in terms of assets as of the end of 2005 with a 5.8% market share. HVB's 187% y/y asset growth, however, reflects the October merger of Eximbanka. State Vojvodjanska banka continued losing positions (it is 6th at the end of 2005 compared to 4th place one year earlier); its assets increased by a mere 3.7% y/y reflecting the restructuring of the lender ahead of its privatization, which is expected to be completed in the third quarter of this year.

Serbia: Total assets of commercial banks, CSD bn, eop

Bank

Dec-03

share , %

Dec - 04

share, %

Dec-05

q/q, %

y/y, %

share, %

Raiffeisen bank Beograd

31.74

8.7

69.18

13.6

119.42

25.2

72.6

15.4

Banca Intesa

43.93

12.1

54.85

10.8

82.13

15.2

49.7

10.6

Komercijalna banka

44.17

12.2

52.22

10.2

74.80

13.5

43.2

9.6

Hypo Alpe-Adria-Bank Beograd

6.58

1.8

28.45

5.6

68.14

37.5

139.5

8.8

HVB banka

7.80

2.1

15.81

3.1

45.31

62.5

186.5

5.8

Vojvodjanska banka

39.83

11.0

36.57

7.2

37.92

-2.6

3.7

4.9

Societe Generale Yugoslav Bank

12.24

3.4

23.03

4.5

33.82

15.7

46.8

4.4

Jubanka

15.39

4.2

18.45

3.6

23.61

11.7

28.0

3.0

0.0

Total bank assets

363.25

100 

510.09

100

775.41

15.4

52.0

 100

Total assets, EUR mn

5.32

6.47

9.07

14.3

40.3

Share of top 3 in total

35.2

34.6

35.6

Share of top 6 in total

51.6

51.8

55.2

Source: NBS; IntelliNews calculations


Meanwhile, in line with expectations, the strong growth in total assets of Serbian commercial banks continued in the final quarter of the year and they reached CSD775.4 billion at end-2005, which represents 52% y/y growth (up from a 40.4% y/y increase in 2004), the latest figures released by the central bank reveal. According to estimates, assets accounted for more than 48% of the GDP at the end of last year, compared with 39.2% one year earlier. When estimated in EURO, the growth was 40.3% y/y (strong acceleration from the 21.6% y/y rise in the previous year) to €9.07 billion. In Q4, asset growth amounted to impressive 15.4% q/q (in CSD terms), which is the highest figure for the year.

The robust growth was hardly surprising considering the strong credit growth, as well as the extension of credit lines to several domestic lenders by international financial institutions in the last few months of 2005. It was the ongoing lending boom, which was the main driver for the hike in assets of Serbian lenders throughout the year.

The numerous attempts of the central bank to limit credit growth were unsuccessful and most of the lenders continued to rely heavily on support from their parents in order to expand their presence in the country. Looking at the concentration ratios, the top three players managed to boost their share slightly and accounted for 35.64% of all assets as of Dec. 31, 2005 compared to 34.55% a year earlier.

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