Sitemap

Jelena Galić, AIK Banka CEO

Strong Banks Guarantee Growth

With more than 800 million euros of foreign currency savings, AIK Banka is today the reliable partner of a large number of citizens and entrepreneurs. By following the trends of modern banking, it has adapted its traditionally economically orientated strategy to markets and clients whose needs it has monitored closely for years

A consistent and effective fiscal policy, a public debt-to-GDP ratio at a level of 52%, and a low and stable inflation rate, with NBS projections that it will remain at this level, all preserve our macroeconomic and banking sector stability, says AIK Bank CEO Jelena Galić with optimism.

The consolidation of the banking system is underway, both on the domestic market and throughout the region, and will continue in the period ahead. Why is the consolidation of banks good for both banks and local economies, but also for all of us, as ordinary citizens?

The merging of banks creates economically stronger banks, with greater potential to mobilise new sources, as well as greater potential to invest in development projects, which ensures the continued growth of the banking sector, and a strong, stable banking sector is one of the basic levers for securing sustainable economic growth.

Viewed as such, the banking sector provides support to domestic economic growth and contributes to regional integration and the strengthening of the economies of the entire region, which is composed of markets that are individually small. On the other hand, the needs of the real sector are similar and regulatory requirements are almost uniform, which increases the possibility for the joint financing of large development projects regionally, with which multiple effects are realised – not only on accelerating national economic growth, but rather also on connecting the economy, expanding the entire regional market, strengthening the competitiveness and economic development of the region. All of this is ultimately good for citizens as well, because stable banks have better and higher quality products, which is the most important factor for users of banking services.

Serbia has been recording GDP growth for the last two years already. Does this create the opportunity for the growth of investment in development projects and faster economic development?

GDP growth of 4% in 2019 and 4.3% in 2018 are extremely important and positive indicators, which create the space for the further growth of investments. The construction sector was the main driver of growth, which is yet more confirmation that investment in infrastructure has an effect on accelerating economic growth that’s several times greater, given that mainly domestic construction operations are engaged. We also shouldn’t forget about greater investments in health infrastructure and education, which improve quality of life and what we call human capital. In the end, building highquality infrastructure eases the operations of the private sector, which is of paramount importance to faster economic development.

In addition to occupying one of the leading positions on the basis of client numbers, AIK Bank is also a leader of the Serbian banking system in terms of capital adequacy

Serbia’s credit rating was raised at year’s end 2019 from BB to BB+, while a positive outlook was maintained. How important is this for attracting foreign direct investment, for accelerated economic growth and development, for strengthening export potential etc.?

Yes, it is true that Standard and Poor’s (S&P) increased Serbia’s credit rating from BB to BB+, which is just one step below the investment rating. The raising of the credit rating is based on strong economic growth expectations for Serbia and a reduction in public debt, which creates a positive outlook for further inflows of FDI. This could further strengthen our exports and Serbia’s resilience to external shocks. FDI inflows for the first eleven months of the previous year amounted to 3.1 billion euros, which represents an increase of 37.3%. With an increased credit rating and continued FDI inflows, we can certainly expect stronger export potential and accelerated economic development.

The percentage of non-performing loans also increased at one point, with the interest of citizens and the economy in loans simultaneously decreasing. What is the situation like today? Do you expect the expansion of credit to continue?

The participation of NPLs is at its lowest level (the NPL level fell further in November 2019 to 4.6%) and is covered by regulatory reserves by over 80%. A positive trend is also being recorded in the adequate structure and improving the quality of banking assets – the ratio of loans and deposits is stable and total around 94%, which shows that credit activity is financed from domestic sources.

At the same time, the capitalisation of the banking sector in Serbia is high – capital adequacy stands at around 23%, which contributes to the banking sector’s resilience to potential shocks. Current trends are good and I expect them to remain so in the future. Interest rates on government securities follow the downward trend in the reference interest rate and are being reduced to new minimums, while interest rates on loans are close to their lowest levels.

Jelena Galić, AIK Banka CEO

Interest rates on dinar loans to households have fallen to their new minimum of 9.1%, while a sharp reduction in the country’s risk premium and a relaxation of the monetary policy of the European Central Bank contributed to the fall in interest rates on euro-indexed loans. Lower financing costs and sustained GDP growth are supported by the credit policy – total loans recorded growth of 10.4% in November 2019, with growth recorded in investment loans to corporate clients and residential loans to households, alongside a slight slowdown in cash loans. All these developments indicate that the continued expansion of credit can be expected, which all together should contribute to achieving higher rates of economic growth and ensuring sustainable development.

Thanks to the digital transformation that you’ve embarked upon, you are strengthening your market and competitive position by the day and acquiring new clients. What can we expect in the coming period? Some new products and services?

Banks need to invest ever more in transformations, in order to remain competitive on the market. This implies the implementation of new, advanced technologies, as well as a clear strategy that defines the business model, market focus, clients and products.

Digital transformation is a strategic commitment of AIK Bank aimed at strengthening its market position, acquiring clients, reducing costs and increasing efficiency

As such, digital transformation implies that clients and the market embrace new technologies and services, which has to date proven to be a challenge. AIK Bank has already stepped into the world of digital transformation, new technologies and innovations. We strive to be turned ever more digitally towards our surroundings, in order to strengthen our market and competitive position, acquire, serve and retain clients, reduce operating costs and increase efficiency.

AIK Bank will continue in this direction in the future, because the satisfaction of our clients is our number one priority.

What made this year’s Kopaonik Business Forum different from all previous editions?

This year it was dominated by topics such as the fourth industrial revolution, digitalisation, education, smart specialisation, employment policy, the brain drain, innovation etc. Serbia is a country with regulated public finances, low and stable inflation and a relatively stable exchange rate; it is a country with double-digit growth in exports and investments, a strong fall in unemployment levels and a rise in private sector earnings, which enables a shift in focus to topics that are important to further development and wider socio-economic progress.

Furthermore, the “Serbian Davos” is an important place not only for us from Serbia, but for the entire Western Balkans. The regional aspect of development is very important, as are the perspectives of each individual economy in our region. We shouldn’t forget that joint regional action makes it easier to realise the effects of economies of scale, which contributes to a significant acceleration of economic growth across the entire region, and consequently has multiple effects on the growth of national economies.

More...

Dušica Gaković, Project Lead, Deka Inženjering [engineering]

We’ll Revive The City

Deka Inženjering is a company that's been operating on our market for nearly 10 years and is currently building more than 250,000 square metres...

Milan Lučić, Director Of The Serbian Business Registers Agency

We Ease Business Operations

Over the previous years, the Serbian Business Registers Agency (SBRA) has been continuously introducing numerous new electronic services for businesses and other customers. With...

Bogdan Gecić, Gecić Law & Terri Pepper Gavulic, TerraLex

TerraLex & Gecić Law Reconnecting A Pandemic Stricken World

Gecić Law aspires to be the foremost innovative law firm by building long-term relationships with clients based on reciprocity, trust and highest standards of...

Sonja and Nataša Vrkatić, owners of the Verkat Winery

Verkat Wine Oasis

Verkat is a small family winery located in the village of Čerević, on the northern side of Mount Fruška Gora, in the close proximity...

News

Richard Grenell: Serbia-Kosovo Agreement Results From Trump’s Different Brand Of Diplomacy

President Aleksandar Vučić of Serbia and Prime Minister Avdullah Hoti of Kosovo took an enormous step toward a long-term...

Agreement On Normalisation Of Economic Relations Between Belgrade And Pristina Signed

President of Serbia Aleksandar Vucic and Prime Minister of the Provisional Institutions of Kosovo Avdullah Hoti signed an Agreement...

Symbols Of Belgrade Lit In Colors Of The Polish Flag

On the occasion of marking the 40th anniversary of the founding of the "Solidarity" movement, Branko's Bridge, the Bridge...

Montenegro Election: First Projections Point To A Tight Race

In Montenegro, the ruling DPS was nearly neck-and-neck with its main rivals, according to early and incomplete projections of...

Gorenje To Hire 600 Temp Workers Due To Surge In Orders

Slovenian home appliance manufacturer Gorenje is hiring some 600 temporary workers to cope with a record number of orders....

Agreement On Normalisation Of Economic Relations Between Belgrade And Pristina Signed

President of Serbia Aleksandar Vucic and Prime Minister of the Provisional Institutions of Kosovo Avdullah Hoti signed an Agreement...

Montenegro Election: First Projections Point To A Tight Race

In Montenegro, the ruling DPS was nearly neck-and-neck with its main rivals, according to early and incomplete projections of...

EU Awards One Million EUR In Grants For COVID Recovery In Tourism Sector

“#EUzaTebe – For Cultural Heritage and Tourism” project has awarded one million euros for 120 projects aimed at supporting...

UNDP And Embassy Of Slovakia Present Feasibility Study On Use Of Thermosolar Energy

The Mayor of Belgrade, Zoran Radojičić, met with the Ambassador of Slovakia to Serbia, H.E. Fedor Rosocha and Resident...

The EU Does Not Recognize Belarus Election Results

Members of the European Council held a video conference, at which they discussed the situation after the presidential elections...