10.5937/industrija42-5867 = Two aspects of concentration in Serbian banking sector (original) (raw)
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The European Journal of Applied Economics
In the last few years there were significant changes in the financial sector on the global level. The aim of this paper is to analyze banking sectors among Serbia, Montenegro and Croatia and make comparative analysis. In these countries the biggest part of financial sector is the banking sector. The covered period of the analysis is 2017-2021 and selected ratios of concentration were calculated to define market structures in these countries. Due to mergers and acquisitions in the last few years the number of the banks decreased significantly. The presented results regarding static and dynamic analysis of concentration indicate that Croatia and Montenegro banking sectors are more concentrated than Serbia banking sector. The significant impact on market structure is the decreasing number of the banks. This is an interesting finding which should be further researched.
Market concentration in the banking sector: Evidence from Serbia
Industrija, 2013
The aim of this paper is to research the level and development of market concentration in the banking sector in Serbia. In the first chapter, the authors presented different concentration theories from economic literature and explained the possible impact of high concentration on various economic parameters. The second chapter provides information on methodology and different indicators used in order to measure the level of market concentration in the banking sector in Serbia. Empirical results of the analysis are presented in the third chapter of the paper and they include concentration of assets, capital, loans, deposits, interest income and net profit (loss) before tax, as well as comparative analysis with Central, Eastern and South European countries. Finally, the last chapter summarizes key messages of the paper.
Concentration Level in the Banking Industry: Serbia, Croatia and Montenegro
Proceedings of the 9th International Scientific Conference - FINIZ 2022
In the last few years there have been significant changes in financial sector on the global level. The aim of this paper is to analyze banking sectors and make a comparative analysis between Serbia, Montenegro and Croatia, given that the banking sector takes up the biggest part of financial sector in these countries. The covered period of the analysis is 2017-2021 and selected ratios of concentration were calculated to define market structures in these countries. Market changes are also reflected in the reduced number of banks due to mergers and acquisitions in the last few years. The results of the static and dynamic analysis of concentration indicate that Serbia's banking sector is slightly less concentrated than Croatia's and Montenegro's banking sector. The decrease in the number of the banks had a significant impact on market structure and it will draw attention to further research.
An Analysis of Concentration and Competition in the Banking Sector of the Republic of Serbia
Economic Themes
The degree of the banking sector concentration is a structural variable and refers to the number of banks in the system and the degree of their market power. The importance of measuring concentration in the banking sector stems from the causal relationship between the market structure and the competitive behaviour of market participants. Traditional models measuring the banking sector competition proceed from the market structure and concentration measures. In contrast, modern approaches to measuring competition rely on non-structural models and analysis of the behaviour of market participants. The paper analyzes the degree of concentration and competition in the banking sector of the Republic of Serbia. The traditional and most frequently used indices, the concentration ratio and the Herfindahl-Hirschman index, are used to measure concentration. The values of these indices show low banking sector concentration but a rise in the observed period. The values of the comprehensive indus...
The impact of market concentration on competitiveness of the banking sector in Serbia
Industrija
The concentration level is proof of development and tendencies on the observed market. It determines the existence of competition and fair play among competitors and participants. This paper aims to analyse and measure the concentration level within the banking sector in the Republic of Serbia. The concentration level is measured applying the concentration ratio for four and five biggest banks (Cr4 and Cr5) and Herfindal-Hirschman index (HH index) in the period from 2018 to the third quarter of 2020 for the following banks' balance sheet positions: assets, approved loans, and collected deposits. The banking market is reported to be medium concentrated according to CR5 and low concentrated according to Cr4 and HHI in all observed categories. The empirical research shows that there is competition among banks in Serbia (loose oligopoly), which depends on the concentration level. Furthermore, the acquired results contribute in the comprehension and perception of the direction in whi...
Measuring of Concentration and Competition: Serbian Banking Sector
Social Science Research Network, 2020
The author in this paper considers the question of the use of indices of concentration and competition in the banking market. As example he chose the Serbian banking sector during the second half of the 2010s. The analyses are based on the data of bank financial statements for relevant years, as well as the results of other researchers. Тhe traditional concentration indicators (CRn and HH indices) are used, as well as the Gini coefficients and Rosenbluth and Tideman-Hall index and coefficient of entropy. At the end author calculated Linda Indices, the rarely used indicators not only in Serbia, and new Svetunkov's approach and coefficients of the model based on Gauss exponential curve. The concentration degree in all cases is calculated based on five variables: total assets, deposits, capital, bank operating income and loans. Although these variables are highly correlated, the results show relatively important differences of its use. In the case of such variable as capital, the Linda indices suggested the existence of an oligopoly structure. In conclusion, it was demonstrated that in the case of the relatively large number of banks in Serbia, the existing concentration degree is generally moderately low, which provides suitable conditions for the development of healthy competition among them. At the end, there is necessary to emphasize different capability of information respective indicators and its different discriminative power. In future research this is fact that is it undoubtedly necessary particularly not to ignore.
Banking Concentration Impact on Market Structure of Post-Soviet Country – Moldova
Journal of Business
The new wave of mergers and acquisitions after the global financial crisis intensified the interest of policy makers and academics inbank concentration and competition and the role of the state in competition policies and regulations (policies and laws that affect themarket structure and degree of competition). It is important to not only make sure that the banking sector is competitive, transparentand efficient but also stable.The purpose of the study was to investigate and analyze the degree of concentration at the Moldovan banking market and itsimpact on competition and market structure of financial markets over the period of 2013-2017. Both structural and non-structuralmeasurement approaches of concentration and competition along with the desk research, a case study and interviews with thefinancial sector professionals and independent expert were employed to address the research purpose.The findings of the study indicate that in the developing country such as Moldova high concen...
Banking Concentration Impact on Market Structure of Post-Soviet Country – Armenia
2020
The new wave of mergers and acquisitions after the global financial crisis intensified the interest of policy makers and academics in bank concentration and competition and the role of the state in competition policies and regulations (policies and laws that affect the market structure and degree of competition). It is important to not only make sure that banking sector is competitive, transparent and efficient, but also stable. The purpose of the study was to investigate and analyze the degree of concentration in Armenian banking market and its impact on competition and market structure of financial markets over the period of 2013-2017. Both the structural and the non-structural measurement approaches of concentration and competition, along with the desk research, a case study and interviews with the financial sector professionals and independent expert was employed to address research purpose. The findings of the study indicate that, in the developing country such as Armenia high concentration implies low or moderate competition levels and relationship between concentration and stability seems to be negative, meaning that high concentration results low stability of this banking market. The banks in Armenia have ability of extracting monopolistic profits from big interest rate spreads by setting less favorable prices to customers based on collusive and non-competitive behavior in highly concentrated market. Competition level and market structure of this country results in high prices of financial product and low access to finance. Armenian financial markets are bank dominated, characterized with monopolistic banking structure, with leading roles of a few universal profile banking institutions, dominating not only banking sector, but whole financial market.
2019
The aim of this paper is to verify the impact of th e market structure on financial stability in the banking sectors in Central and Eas tern European countries, with particular emphasis on the change in the concentrat ion and the share of foreign capital in the period 1999 – 2015. Using the method ol gy of panel regression, GMM estimator, we examine the implications of banks ’ concentration on bank stability of a group of countries from Central and Eastern Europe. Because many empirical studies have examined the role of market concentration, we complement our results with findings on the market concentrati on-bank fragility trade-off. Employing a concentration ratios (CR5 and HHI) we f ind that CEE banks are more fragile within a concentrated environment. Our results also reveal that the persistence of risk is affected by the level of ban k concentration and this effect is exacerbated mainly during downturns. Finally, the r esults of this research did not lead to any definite conclu...
Concentration level of the banking industry in CEE countries
Industrija, 2013
The purpose of the paper work is to determine on the basis of empirical research, if there is a relation between the level of concentration and competitiveness within banking sector of chosen countries of Central and Eastern Europe (CEE):