Cross S ection of the F inancial S ector Developments in Bosnia and Herzegovina

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Cross S ection of the F inancial S ector Developments in Bosnia and Herzegovina. Radomir Božić. Ph.D. Sarajevo. October 5. 2011. Fifth SASE International Conference. Macroeconomic indicators. The structure of BH financial sector. - PowerPoint PPT Presentation

Text of Cross S ection of the F inancial S ector Developments in Bosnia and Herzegovina

  • Cross Section of the Financial Sector Developments in Bosnia and Herzegovina

    Radomir Boi. Ph.D.Sarajevo. October 5. 2011.

    Fifth SASE International Conference

  • Macroeconomic indicators.*

    200920102011Gross domestic product (GDP) KM 23.95 bill KM 24.75 billGDP per capita KM 6.233KM 6.440Real growth rate-3.2%0.7%3.2% (proj.)Industrial production growth rate -3.3% 1.6%7.7% (period till June)The average annual inflation0.0%3.1%3.8% (June)Unemployment rate at the state level24.1%27.1%27.6 %Average wage at the state level KM 790KM 798KM 820 (June)External debtKM 5.2 bill (21.7% GDP)KM 6.25 bill (25.4 % GDP)KM 6.193 mill (June)Current account deficitKM 1.48 bill (6.2% GDP) KM 1.36 bill (5.5% GDP)KM 1.423 mill Q1(16.7 % compared to 2010)Coverage of import by export44.8%52.1%58.1%DFI (estimate) KM 358.9 millionsKM 93.7 millionsKM 131 mill in Q1Foreign exchange reserves KM 6.212 bill KM 6.457 bill KM 6.265 mill (Aug)

  • The structure of BH financial sector The banking sector dominates the financial system in Bosnia and Herzegovina. The share of this sector in the assets of the financial system amounted to 84.3% at the end of 2010. At the end of 2010 82% of average equity was concentrated in banks with majority foreign ownership. A large percentage of foreign ownership is a potential risk due to the fact that the strategic decisions are made out of the scope of monetary authorities of Bosnia and Herzegovina.Table: The value of the assets of financial intermediaries

    *

    2007200820092010Value. KM millionsShare. %Value. KM millionsShare. %Value. KM millionsShare. %Value. KM millionsShare. %Banks 19.57079.820.81580.820.60482.720.41684.3Investments Funds1.7627.21.2254.88713.58883.7Leasing Companies 1.3785.61.6076.21.4165.71.1084.6Insurance and Reinsurance Companies 8533.58903.59403.89413.9Microcredit Organization9463.91.2134.71.0874.48563.5Total24.51025.74924.91924.210

  • Profitability and the level of the non-performing loans.*

  • The results of the banking sector of Bosnia and Herzegovina for Q2 2011Better business results compared to the same period last year KM 82.9 millions of profit compared to KM 63.9 millions of lossThe total income of banks in this period amounted to KM 828.4 millions (increase by 5% compared to Q2 2010), while total expenditure amounted to KM 741.7 millions (decrease by 13% compared to Q2 2010)22 banks reported the positive financial result (profit) in the total amount of KM 100.5 millions and 7 banks reported negative financial result (loss) in the total amount of KM 17.1 millions*

  • The results of the banking sector of Bosnia and Herzegovina for Q1 2011The total of 29 commercial banks, two under provisional administration25 banks had a licence for the deposit insuranceThe total of 10.319 employees, being the increase of 0.4% compared to Q1 this year*

    31.12.2008. 31 .12. 2009.31. 12. 2010.31. 03. 2011.Total number of banks30302929Private owned banks28282828State owned banks2211

  • The structure of share capital At the end of the first quarter realized capital adequacy ratio amounted to 15.5 (at the end of 2010 it amounted to 16.1).

    *

    31. 12. 2008amount Share31. 12. 2009amount Share31. 12. 2010amount Share31. 06. 2011amount ShareTOTAL CAPITAL1.528100 %1.597100 %1.719100 %1.746100 %STATE CAPITAL493 %443 %543 %503 %PRIVATE CAPITAL1.47997 %1.55397 %1.66597 %1.69697 %Herein:-foreign capital1.28484 %1.34784 %1.41682 %1.44182 %-domestic capital19513 %20613 %24915 %25515 %

  • The banks assetsThe banks continue to keep significant funds in the accounts with depository institutions abroad amounting to KM 1.66 billions, which is 32% of total funds. Compared to the same period of 2010, this share decreased by three percentage points.*In KM millions

    31. 12. 2008 amount Share31. 12. 2009amount Share31. 12. 2010amount Share31. 06. 2011amount ShareTOTAL ASSETSOut of which:20.821100 %20.617100 %20.451100 %20.648100 %-Funds6.18030 %6.28831 %5.75628 %5.16325 %-Placements to other banks1091521 %2031 %3882 %-Loans13.51865 %12.84262 %12.95363 %13.38865 %-Fixed assets and business premises6743 %7313 %7654 %7594 %-Securities331711 %4312 %5682 %-Other3072 %4332 %3432 %3822 %

  • The banks liabilitiesThe share of obligations in total liabilities is 88% and the share of equity is 12%

    *In KM millions

    31. 12. 2008 Amount Share31. 12. 2009 Amount Share31. 12. 2010 Amount Share31. 06. 2011 Amount ShareTOTAL LIABILITIESOut of which:20.821100 %20.617100 %20.451100 %20.648100 %-Deposits15.16773 %15.20774 %15.01173 %15.07773 %-Liabilities based on loans2.55912 %2.32911 %2.12011 %2.13110%-Borrowing from other banks3372-Reserves for potential loan losses22234347-Capital2.16611 %2.21011 %2.40212 %2.48712 %-Other liabilities9044 %8454 %8684 %9045 %

  • The structure of deposits by sectorsThe deposits in local currency increased by KM 143 millions or 8% and deposits in foreign currency decreased by KM 77 millions or 1%. The share of deposits in local currency in total deposits increased by one percentage point - from 44% to 45%.*In KM millions

    31. 12. 2008 amount Share31. 12. 2009 amount Share31. 12. 2010 amount Share31. 06. 2011 amount ShareTOTAL DEPOSITSOut of which:15.167100 %15.207100 %15.011100 %15.077100 %-Government institutions2.13214 %1.83312 %1.46610 %1.2418 %-Public enterprises1.56710 %1.64510 %1.65411 %1.88413 %-Econ. comp. and associoations2.13414 %1.97513 %1.94113 %1.74212 %-Non-profit organizations3122 %5593 %4703 %4973 %-Banking institutions3.17721 %2.95319 %2.36216 %2.37516 %-Households5.31135 %5.76140 %6.62444 %6.85145 %-Other5343 %4813 %4943 %4893 %

  • The structure of deposits by currenciesIn period January March 2011 there was a change in the maturity structure of deposits the share of short-term deposits increased from 53% to 55% and the share of long-term deposits decreased from 47% to 45%. *In KM millions

    31. 12. 2008 amount Share31. 12. 2009amount Share31. 12. 2010amount Share31. 06. 2011amount ShareTOTAL DEPOSITS15.167100 %15.207100 %15.011100 %15.077100 %Out of which:-Deposits in KM6.03040 %6.21141 %6.57344 %6.71645 %-Deposits in foreign currency9.13760 %8.99659 %8.43856 %8.36155 %

  • SavingsThe savings in local currency increased by KM 135 millions or by 8% and the savings in foreign currencies increased by KM 108 millions or by 2%.*In KM millions

    31. 12. 2008 amount Share31. 12. 2009 amount Share31. 12. 2010 amount Share31. 06. 2011amount ShareTOTAL SAVINGS4.808100 %5.255100 %6.044100 %6.287100 %Out of it:-Savings in KM1.44730 %1.43527 %1.71228 %1.84729 %-Savings in foreign currencies3.36170 %3.82073 %4.33272 %4.44071 %

  • Loans*In KM millionsThe loans to private companies increased by KM 354 millions or 5% and the loans to households increased by KM 98 millions or 1.5%.

    31. 12. 2008 amount Share31. 12. 2009amount Share31. 12. 2010amount Share31. 06. 2011amount ShareTOTAL LOANS14.040100 %13.496100 %13.936100 %14.407100 %Out of which:-Private companies6.63347 %6.47448 %6.73248 %7.08649 %-Public enterprises2222 %2372 %3092 %3502 %-Government institutions 2311 %3432 %4363 %4453 %-Households6.68748 %6.29247 %6.31446 %6.41245 %-Other sectors2672 % 1501 %1451 %1141 %

  • Lending interest rates*The data on the average interest rate on loans to private companies and households in foreign currencies are provided by small number of banks and therefore not included in this review.

    YearINTEREST RATES ON LOANS IN KMINTEREST RATES ON LOANS IN KM WITH CURRENCY CLAUSEINTEREST RATES ON LOANS BY CREDIT CARDSShort-term loansLong-term loansShort-term loansLong-term loansShort-term loansto householdsLong-term loansto householdsPrivate companies and associationsHouseholdsPrivate companies and associationsHouseholdsPrivate companies and associationsHouseholdsPrivate companies and associationsHouseholds20067.669.557.399.34..................20077.0310.547.19.977.810.067.838.4211.5612.7620087.429.147.1611.098.939.888.5510.211.4413.9620098.19.886.87.878.629.817.749.5611.7115.0620107.849.678.259.18.159.517.848.711.93147.20117.399.937.478.368.509.597.658.5711.6414

  • Deposit interest rates*The data on the average interest rate on deposits by private companies and households in KM with currency clause are provided by small number of banks and therefore not included in this review.

    YearINTEREST RATES ON DEPOSITS IN KMINTEREST RATES ON DEPOSITS IN FOREIGN CURRENCIESDemand DepositsTime and Saving DepositsDemand DepositsTime and Saving DepositsPrivate companies and associationsHouseholdsPrivate companies and associationsHouseholdsPrivate companies and associationsHouseholdsPrivate companies and associationsHouseholds20060.370.493.753.48............20070.330.353.653.980.060.363.413.8320080.370.322.993.610.110.314.944.220090.30.253.63.570.220.274.234.1820100.170.153.382.890.040.183.213.257.20110.150.112.013.000.020..272.623.22

  • Microcredit sector in Bosnia and Herzegovina as of June 30, 2011There is a trend of reducing the number of employees, as well as the number of organizational units.Compared to December 31, 2010. number of employees decreased by 3.4% (total of 64 employees)

    24 microcredit organizations operating on state levelFederation of BHRepublika Srpska16 microcredit foundationsOne microcredit associationFour microcredit foundationsThree microcredit associations

    1.844 employees in BH micorcredit sectorFederation of BHRepublika Srpska1.477 emloyees367 employees

  • The organization of microcredit sector in Bosnia and HerzegovinaThe legal basisThe Law on microcredit sector in the Federation of BHThe Law on microcredit sector in RS

    Form of organizationMC