Banking sector outlook

Bosnia and Herzegovina

2015

Banking sector overview

PCB
Sparkasse
2%5%

Other banks
33%

Bosna Bank International

3%

Raiffeisen
15%

At the end of June 2015

the banking sectors
consisted of 26 banks

Total assets of Banking

sector is 22.8mld BAM,
increased by 1,8%,
compared to the end of
2014

NLB Banka
4%

*Represented our peer banks

Intesa Sanpaolo Bank
7%

Ziraat Bank
3%

Sberbank
4%

Nova Banka
7%
UniCredit Bank
18%

**Categorization is done
based on local standards,
volume of assets

Loans

PCB has 2,1% share in total loans, and recorded increase of share by 0,2%

Raiffeisen
14%
Raiffeisen Bank decreased GLP in volume of 0,7% or share in the total loans
NLB Banka
4%
decreased by 0,4%
Intesa Sanpaolo Bank
Ziraat Bank recorded the highest growth of GLP 13%
7%
Ziraat Bank Sberbank
UniCredit Bank
2%
5%
17%
compared to 2013

PCB Sparkasse Bosna Bank International

2% 5%
2%
Other banks
39%

Number of employees

Banks had structural changes, reflected in unstable number of staff over recent
years

Exceptins are: Raiffeisen Bank ,Ziraat Bank and Intesa Sanpaolo Bank.

PCB was bank with highest decrease of number of employees due to business
model change.

Gross loan portfolio per employee

Almost all the Banks have increased efficiency due to growth of their loan portfolio

PCB efficiency grew strongly in comparison with the other banks

Deposits

PCB has 1.7% share in total deposits, and recorded same share
compared to 2014.

Raiffeisen Bank decreased deposits in volume of -2% or share in the

total deposits by 0,4%

Emerging Bank Ziraat Bank

PCB Sparkasse
2% 6%
Bosna Bank International
Other banks
3%
31%
Raiffeisen
19%
NLB Banka
5%
UniCredit Bank
Intesa
Sanpaolo Bank
20%
7%
Ziraat Bank Sberbank
5%
2%

Deposits to Loans ratio

2013

2014

2015

140%

130%

127%
126%
124%

120%
113%
110%
104%
101% 100%

100%

113%

110%
110%
106%

108%

106%
102%

94%
91%

93%
90%

80%

87%
85%
81%
77%

87%

80%

88%
83%
78%

73%
70%

60%
PCB

SparkasseBosna Bank InternationalRaiffeisen

NLB Banka Intesa Sanpaolo Bank Sberbank

Three leading banks have depostis to loans ratio more than 100%

PCB has the lowest depostis to loans ratio, and this ratio is showing decreasing
trend in current year

Ziraat Bank

UniCredit Bank

NPL Analysis
16%
15.1%
15%
14.1%

14.0%

Total level of NPL in sector increased by 0,1% from

14%

14.0% in Q4 2014 to 14,1% in Q2 201

13.7%

13.7%

13%
13.4%

.
PCB NPL ratio is 13,7% in Aug 2015

13.0%
12%
11%
10%
41639

42004

42185

NPL Banking sector BiH

42247

NPL PCB

%NPL ratio
There is an increase of NPL in most SEE countries
Serbia

23.0

starting from 2008.

Montenegro

17.2

Macedonia, FYR

Local regulations aside, when compared to other

11.3

neighboring countries, Bosnia had lower than average NPL

Croatia

16.4

Bosnia and Herzegovina

growth rate.

14.0

Albania

23.5
0

10

15

20

25

Operational efficiency of the banking sector

100%
90%

4%
0%

4%
4%

3%
0%

2%
4%

4%
8%

Structure of assets
1%
3%

2%
0%

2%
8%

3%
4%

6%
1%

80%
70%
60%
50%

75%

75%

77%

59%

67%

73%

67%

86%

79%

81%

40%
30%
20%
10%
0%

6%
6%

6%

12%

11%

14%
5%

22%

15%

6%

11%

17%

7%
5%
7%

16%

7%
5%

Tax assets
Fixed assets
Other assets
Financial investm ent
Net loans
Receivable for interes t and fee
Cash in foreign Banks
Cash and cash equivalents

0%
12%

ProCredit bank ,Sparkasse ,Sberbank , Nova Banka,BBI and Ziraat recorded the highest share of net GLP in total assets, in range of 75%-81%
The most profitable banks in sector (RZB, Unicredit) have a higher share of highly liquid assets in total assets, which ranges from 20% -28%
Total assets by banks
4,079,376,806
3,976,775,289
3,745,227,303

3,800,453,296
3,708,080,871
3,668,607,453

4,500,000,000
4,000,000,000
3,500,000,000
3,000,000,000
2,500,000,000
2,000,000,000
1,059,732,625 638,164,041
1,038,138,110
965,548,322
1,500,000,000362,473,037
666,378,372
563,296,636
409,561,289
388,486,936
1,000,000,000
500,000,000
0

1,554,683,677
1,443,063,563
1,333,193,597
1,006,845,034
1,007,328,882
922,274,551
910,165,657
862,849,388
803,559,519

Dec-13

Dec-14

Jun-15

1,594,748,520
1,583,596,265
1,458,138,169
601,927,040
545,921,575
397,489,676

Operational efficiency of the banking sector

Interest income/Total assets
8.00%
7.00%
6.00%

7.07%

5.96%

5.00%

5.13% 5.09%
4.55%
4.17%
4.03%

4.00%
3.00%

5.97%
5.77%
5.37%

4.81%

5.09%

5.94%
5.71%

5.33%

5.80%
5.35%

4.72%
4.46%

5.47%
5.38%

5.10%

5.23%
4.81%
4.63%

4.66%

6.33%

5.30%

4.63%

Dec-13
Dec-14
Jun-15

5.35%

PCB generates the highest interest income / total assets and amounts to 5.96%
Unicredit Bank recorded same level of interest income in 2015;

in milion BAM
Interest income

PCB
Dec-13 24,282

Bosna
Sparkass Bank
NLB
Raiffeisen
e
Internatio
Banka
nal
57,667
20,733 190,063 40,413

Intesa
UniCredit
Sanpaolo Sberbank
Bank
Bank

Nova
Banka

Ziraat Bank

79,036

43,085

180,563

73,005

16,378

Dec-14 23,777

57,856

25,080

180,766

40,448

79,296

50,021

179,857

82,161

22,672

Jan-15 11,901

28,142

13,135

93,888

20,415

39,946

26,706

93,206

42,478

13,281

Operational efficiency of the banking sector

3.00%

2.93%

Interest expenses/Total assets

2.85%

2.68%

2.55%

2.50%
2.18%

2.12%

2.00%

1.78%

1.75%
1.48%

1.27%

2.02%
2.02%
1.91%

2.00%

1.97%
1.72%
1.53%

1.50%

2.28%

1.62%

Dec-13
Dec-14
Jun-15

1.48%
1.30%
1.29%

1.44%

1.37% 1.34%

1.14%
1.06%

1.00%
0.50%

2.47%

1.28%

0.91%

Decreasing trend in the average cost of borrowed funds are in all presented banks, except Raiffeisen
As is the case with interest income, interest expenses in PCB has fastest declining trend by 0.5% per year

in milion BAM
Interest expenses

PCB

Bosna
Bank
Sparkasse
Raiffeisen
Internation
al
16,596
9,925
50,837

Dec-13

10,076

Dec-14

9,266

15,315

10,506

Jan-15

4,226

6,674

4,821

NLB
Banka

Intesa
UniCredit
Sanpaolo Sberbank
Bank
Bank

Nova
Banka

Ziraat Bank

18,069

26,621

15,006

40,468

38,071

3,391

48,077

16,915

24,675

18,853

40,968

40,976

6,135

24,720

7,429

10,781

9,638

18,411

20,286

3,713

Operational efficiency of the banking sector

NM I (av erage asse ts)

6.00%
5.50%
5.00%
4.50%
4.00%

4.25%
4.25%
4.09%

4.13%
3.85%

3.53%

3.50%
3.00%

3.78%
3.39%
3.33%

3.96%
3.71%
3.60%

2.83%
2.82%
2.75%

2.55%

3.51%
3.33%

Dec-13
Dec-14
Jun-15

2.79%
2.70%
2.62%

2.43%
2.37%

2.50%
2.00%

3.94%
3.93%
3.89%

3.76% 3.75%

3.86%

3.75%

PCB achieved 24.6% of the fee income (including disbursement fee) in total income, with an annual growth in share of 1,5%.
Largest share of fee income in total income has achieved NLB with 33%.
Fee income/Total income

40%

34%34%
33%

35%
29%

30%
25%
20%
15%

25%25%
23%

27%
26%
24%

28%
26%

30%
29%
29%

29%
27%
27%

27%27%27%

Dec-13

25%
20%21%
19%

24%
23%
21%

22%
19%

Dec-14
Jun-15

Operational efficiency of the banking sector

Personal exp./Num. of employees monthly

,000

,500

3,072
3,012
2,915

2,868

,000

2,609
2,597
2,560

,500

2,126
2,118
2,064

2,098
2,064
2,006

,000

2,565
2,479

2,520
2,349
2,328

2,482
2,410
2,396

2,634
2,483 2,488

2,617
2,435
2,387

2,336
2,190
Dec-13
Dec-14

,500

Jun-15

,000
500
0

2,029

Average personnel expense per employee in PCB in 2015. was on higher level compared to the 2014
Administrative expenses per employee increased in all banks; average administrative expense per employee in PCB increased as a result of less
number of staff compared to the 2013
Administrative exp./Num. of employees monthly4,863 4,635
4,566

5,000

4,341
4,317
4,269

4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000

3,532
3,251

3,879
3,737
3,608

3,865
3,806
3,751

2,785
2,407
2,344
2,333

3,639
3,542
3,359
2,737
2,660
2,654

4,130
3,884 3,870

*includes all operational exp.

without gross sallaries
(includes depreciation)
2,934
2,854
2,699

Dec-13
Dec-14
Jun-15

Operational efficiency of the banking sector

C/I ratio
100%

97%

90%
83%

80%

79%

80%

76%
72%

71%
70%

70%
62%62%
58%

60%

65%
62%

64%
59%59%
54%

58%

Dec-13

67%
63%

63%

63%
58%
54%

62%

59%
56%
50%

50%

40%

71%

92%

ProCredit bank is still with the highest share of administrative costs in total net operational income, but with decreasing trend of that ratio
All analyzed banks, recorded decrease of C/I ratio, comparing to the last year

Dec-14
Jun-15

Operational efficiency of the banking sector

ROE

20%
18%
15.4%

16%

13.7%

14%

12.5%
11.3%

12%
10%
8%

8.9%
7.5%

6%

2%
0%

2.6%

10.0%
9.6%

9.9%

8.3%
6.2%
5.2%

3.1%
4.5%
3.4%

4%

10.2%

9.4%

10.4%

7.3%

Dec-13
Dec-14

9.6%
8.9%

Jun-15
5.4%

4.9%

5.1%
3.4%
2.3%

0.1%

2.5%

0.2%

All analyzed banks recorded increase of Return on Equity

ROA

3%
3%

2.1%

1.9%

1.9%

2%

1.6%
2%
1%

1.1%
0.9%

1%
0%

0.3% 0.0%
0.0%

1.4%
1.1%
0.4%
0.7%
0.7%

1.0%

1.4%
1.0%

0.6%
0.5%

Dec-13
Dec-14
Jun-15

1.6%
1.6%
0.8%

0.8%
0.8%

0.8%

0.7%

0.5%
0.4%
0.7%

0.8%

Operational efficiency of the banking sector

Number of units
120

100

80

60

40

20

0
0

20

40

60

80

100

120

140

160

180

200

Tota l Assets/ Num. employee

3,338,279

3,500,000
2,911,393

3,000,000
2,594,489
2,500,000

2,217,014
2,185,554
2,089,931

2,000,000
1,500,000
1,000,000
500,000
0

1,437,057
1,261,321
1,050,646

2,108,7922,482,334
2,349,861

2,045,398
2,018,984

2,769,796
2,524,988
2,154,847

2,054,550
1,793,660

3,158,929
2,923,675
2,337,190

2,385,889
2,184,429

2,562,454
2,515,376
2,351,836

2,360,498
2,210,209
1,735,763

Dec-13
Dec-14
Jun-15

Operational efficiency of the banking sector

Financial result
70,000,000
61,245,992
60,000,000

55,335,238

53,859,368

50,000,000
42,512,339
40,000,000

41,443,723

35,832,780
Dec-13

30,000,000

Dec-14

10,638,411
9,936,438
8,507,781

10,000,000
0

Jun-15

19,527,127

20,000,000

1,105,681
95,719
25,844

4,013,732
2,972,468
1,411,480

13,593,693
12,041,291
5,177,670
4,482,615
4,211,578

4,621,627
3,838,520
2,724,627

11,426,131
10,117,382
6,537,562
3,797,646
2,000,055
1,906,958