Bosnia and Herzegovina

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Bosnia and Herzegovina
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UBBiH
UDRUŽENJE BANAKA BOSNE I HERCEGOVINEUDRUGA
BANAKA BOSNE I HERCEGOVINE???????? ?????? ????E
? ??????????EBANKS ASSOCIATION OF BOSNIA AND
HERZEGOVINABranilaca Sarajeva 20/III, 71000
Sarajevo, Bosna i Hercegovina, Tel [phone]
630, Fax [phone]www.ubbih.baTHE
ECONOMY AND BANKING SECTOR IN BOSNIA AND
HERZEGOVINA Mr. Dino Osmanbegovic, President
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• SUMMARY
• I. BH in brief
• General Facts
• Macroeconomic Landscape
• Key Macroeconomic Data
• Major Risks
• II Financial Sector in BH
• Size and Structure
• III Banking Industry
• Facts
• Figures
• Present Challenges
• IV Banking Association of Bosnia and Herzegovina
• Profile
• Our expectations

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I BH in briefGeneral facts

• Population 3,8 mio (est.)
• Capital Sarajevo
• Area 51.197 km²
• Currency (1 KM1.95583)
• Complex state structure
• 3 nations
• 2 entities1 district
• 13 governments

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• I BH in brief
• Macroeconomic landscape
• Central Bank of BH
• Currency Board Arrangement
• Mandatory Reserves
• Banking Supervision
• 2 banking agencies (still separate but
  coordinating)
• Relatively conservative approach
• Administration for indirect taxation (VAT and
  customs)
• centralized collection with entity level
  distribution
• Direct taxation (corporate income, personal) on
  entity level

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I BH in briefKey Macroeconomic Data
Data Source Thomson Reuters
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• BH in brief
• Major Macroeconomic Risks
• GDP growth-present negative with forecasted very
  low rate
• Budget deficit-still over IMF Stand-by Agrm.
  Target
• Increase of Current Account Deficit-despite of
  significant reduction of both export and import
• Credit portfolio volume-reduced for 2, compared
  to 27 growth in 2008
• Positive light
• No FX risk and controlled inflation, due to the
  Currency Board

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• II Financial Sector in BH
• Size and structure Source Central Bank BH

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III Banking industry Facts

• 80 of Financial Sector
• 31 Registered Banks
• Federation BiH, 19 banks
• Republic of Srpska 10 banks
• 2 Banks under Administrator
• 90 foreign owned
• Over 75 of total assets with 4 key players
• High of GDP penetration
• Relevant share of retail loan portfolio
• High capital adequacy ratio (CAR) over 16
• Low profitability

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III Banking industry Figures(in mio
KM) Source Banking Agencies of FBiH and RS
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III Banking industry Present challanges

• IMF Stand-by Agreement
• Vienna initiative 63 (mother banks to keep
  exposure with BH)
• Consumer protection legislation implementation
• Public high expectation from banking sector
• Acceptable results of first stress tests
• NPL increased, but still acceptable (2,8 Q2
  2009)
• Decrease of income with increased interest rates
• Funding reduced and more expensive

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IV Banking Association of Bosnia and
HerzegovinaProfile

• Founded in 2004, fully independent
• First Association on state level
• Completely self funded by member banks
• All registered banks in full membership
• Organized trough
• Assembly
• Board of Directors
• Executive Secretary
• 9 Commissions for different fields
• OUR MISSION
• -To improve and develope close cooperation among
  the member banks
• -To establish partnership with state
  institutions, supervisors and legislators
• -Public relations and media communication
• -Education
• -To cooperate with similar institutions in the
  country and abroad

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IV Banking Association of Bosnia and
HerzegovinaOur expectations

• To be fully dedicated to the spirit of EBF
• Full membership with EBF
• Organizational support and know-how transfer
• Exchange of information and expertise in
  legislation, good banking practice

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• Thanks for your confidence