Serb Central Bank Says Lenders Coped With Fund Withdrawal

Serbia’s banking industry has adjusted to the withdrawal of funds from lenders based outside the country, the Balkan nation’s central bank said.

Serbian banks with parents based overseas made up 74 percent of the Balkan nation’s banking industry by assets, said the bank. Parent banks withdrew 2 billion euros ($2.6 billion) from their Serbian units over the past four years while local saving deposits rose by 3 billion euros, Belgrade-based Narodna Banka Srbije said today in an e-mailed statement.

“The gradual process did not bring into question the stability of the domestic financial sector,” the central bank said, without naming the banks. A report published by international lenders gathered in Brussels this month noted a retreat of Western banks from emerging Europe.

“The dominant source of financing of the banking industry is the domestic deposits,” the central bank said. “Serbia is among rare countries in the region that during the crisis had a slowdown, but not a decline, in credit activity.”

At the end of September, combined capital of banks exceeded 5 billion euros compared with between 4.1 billion euros and 4.7 billion euros from 2008 to 2010, the bank said.

“The decreased exposure of the European banking groups has been accompanied by a positive change in the behavior” of the local units that now rely less on borrowing from their owners and more on international lenders, the central bank said.

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