Berislav Kutle, director of the Association of Banks of Bosnia and Herzegovina (BiH), spoke about whether the war in Ukraine threatened the banking sector.
“The war has brought unrest to everyone’s soul and it will last as long as the war lasts, especially since we have witnessed the war in BiH and all the negative consequences it has brought. That is why, even at the beginning of the crisis, there were queues in BiH in front of Sberbank, because Russia was associated with it. Fortunately, Russia and Sberbank have not been connected since 2014 because there were sanctions against Russia that year, and Sberbank, which operated within the bank in Austria, did well enough – even among the best in BiH – and there was no reason for any kind of a problem. But it is clear that it is easy to say – when people see all the negative news. They also wanted to be convinced it is true. Agencies also reacted because Sberbank could only be destroyed by its clients – if everyone suddenly tries to get to what is not possible. Sberbank is now owned by domestic banks, “ Kutle reminded.
It is not realistic to expect an increase in interest rates, Kutle emphasized, neither in the short nor in the medium term – it is this year and next. There are two reasons, he says: “This year the money supply in BiH is much higher than the demand, and interest rates are very low. Housing loans are at lower interest rates than in one part of the European Union (EU). Banks can’t wait to place their money. Another thing is the increase in the price of EU money. The European Central Bank (ECB) should raise interest rates by pure economic categories, inflation is rising, but due to the situation in Europe, over-indebtedness, because the ECB prints 700-800 billion euros of unsecured money every year – it is difficult to expect an increase in interest rates this year. eurozone. In the United States (U.S.), the mentioned increase in interest rates will be up to some 0.5 percent, but it will not be felt in our market.
Kutle also explained what happens when someone has more than 50.000 BAM, as guaranteed by the Deposit Insurance Agency: “It is a matter of legislative regulations. 50.000 BAM is per individual share, the rest would come to the mass of a failing bank. But we have no indications that a bank is in a worse position than it was in the past, nor can this crisis affect the quality of banking operations. If it lasts in the long run, it will affect the profitability of banking, because all clients who work with banks will have their problems due to various price increases, especially energy, which means increased inflation.Purchasing power will not be able to increase in such a way that it can match the increase in prices, and it is clear that in this stagnation and inflation, banks will achieve lower profitability, and it has nothing to do with stability and security of money.”
E.Dz.
Source: Federalna
