Slavko Carić, Chairman of Executive Board of Erste Bank Serbia – Continuous support to clients and the community

We strive to provide favourable financing conditions and thus contribute to development and growth.
We continue to have a positive impact on the community through our operations.

In his interview for Diplomacy and Commerce magazine, Chairman of Erste Bank’s Executive Board, Slavko Carić, talks about the Bank’s operations, contribution to environmental protection and financial health of its clients.

Slavko Carić, Chairman of Executive Board of Erste Bank Serbia

How would you rate Erste Bank’s operations in the first three quarters of this year?

We are very pleased with the results achieved so far. At the end of the third quarter, our net profit was 11.6 percent higher than in the same period last year. In that period, we saw the continuation of positive trends in our operations, especially in working with our retail and micro clients. Loans granted to this segment grew by 6.2%, driven by cash loans for our retail clients, as well as loans for financing working capital and loans from the guarantee scheme granted to our micro clients, while deposits increased by 15.3%. I would also like to point out the significant growth of more than 22 percent in the number of our digital service users, which proved to be an important aspect especially at the time of the ongoing pandemic.

On the other hand, we have invested additional effort into facilitating access to finance for companies. Together with the European Bank for Reconstruction and Development (EBRD), we have provided two credit lines for small and medium-sized enterprises in the total amount of 30 million euros. One credit line is intended to support the competitiveness of small and medium-sized enterprises. Funding will help them reach the best industry standards and implement European Union directives. The aim of this support is to encourage small and medium-sized enterprises to invest in implementing the EU standards in three key areas – environmental protection, health and safety and product quality.

Financial literacy contributes to the prosperity of society as a whole, economic growth and a lower risk of poverty, as well as social inclusion and stability.

The second credit line is intended to support the resilience of small and medium-sized enterprises and will provide our clients with short-term liquidity while helping them to mitigate the negative effects of the Covid-19 pandemic. The funds should support the country’s rapid economic recovery and boost its resilience in the medium to long term. It is quite clear that the segment of small and medium-sized enterprises is one of the key driving forces behind the Serbian economy and therefore we are doing everything to provide more favourable financing conditions for them as they continue to develop their business.

We get the impression that sustainable business is high on Erste Bank’s list of priorities, bearing in mind that you have recently joined two United Nations initiatives. 

Erste Group has joined the United Nations Net-Zero Banking Alliance. Thus, we are committed to reducing our credit and investment portfolio to net zero emissions by 2050 at the latest. Earlier this year, we adopted new coal policies and joined the EU’s Green Consumption Pledge. This means that we have tightened the financing parameters for coal-related thermal energy activities by updating the chapter on fossil fuels in our “Responsible Financing Policy”. Also, Erste Group is one of the founders of the UN initiative dedicated to promoting universal financial inclusion and the banking sector that supports the financial health of clients. Financial literacy contributes to the prosperity of society as a whole, economic growth and a lower risk of poverty, as well as social inclusion and stability.

Speaking of individual activities in Serbia, we have been implementing the free financial education programme called #ErsteZnali for almost three years now, which, among other things, helps our citizens to better understand financial products and thus make responsible financial decisions. I am very proud that we have just presented the educational online game called “Guardians of the Dragon’s Treasure”, which teaches primary school children how to develop healthy financial habits from an early age. Imagine how big of a step it is for a bank to make the first modern mobile game that deals with financial education. In this way, we have joined a major initiative to improve education and introduce innovative educational tools.

You recently mentioned in an interview that the number of banks in Serbia will decrease and that there are currently more of them that will be needed once digitalization takes hold. How do you see the future of the banking sector in Serbia?

I believe that by consolidating, banks will try to maintain profitability while fighting stiff competition from the traditional business while dealing with external pressures from fintech companies. Serbia currently has about 27 bank branches per 100,000 adults, and in terms of the market saturation and dynamics of digitalization of business, that number will range between 10 and 15, which corresponds to having around 12 banks on the market. In regard to crisis situations, smaller banks or banks with particular business models are always more susceptible to negative effects that, in pessimistic scenarios, could force shareholders to initiate a sale or try to merge with another bank.

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