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Competitive Business Case. MBA – March 2004. Delta Bank vs Panonska Bank. Index. H istory B asis of Banks P arametars of Work Overview of Banking Sectors in Serbia Nomber of Banks in Serbia Players Rang M arket Activites Balance Sheet Structure of Banks in Serbia

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Competitive business case l.jpg

Competitive Business Case

MBA – March 2004

Delta Bank vs Panonska Bank


Index l.jpg

Index

  • History

  • Basis of Banks

  • Parametars of Work

  • Overview of Banking Sectors in Serbia

  • Nomber of Banks in Serbia

  • Players

  • Rang

  • Market

  • Activites

  • Balance Sheet Structure of Banks in Serbia

  • Comparation with Banking Sector in Europe

  • Potencial and Forecaste

  • Near future

  • Banks’ fokus

  • SWOT

  • Conclusion

  • Sources

  • Authors


History l.jpg

The Bank is part of Delta Holding and was established in 16/10/1991.

Delta Bank is private bank

was established in 1974year by state. Ownership of the Bank was socialistic social.

Since 1995, it has been operating as a joint-stock bank.

Now, the State’s stake is 83% of the Bank’s share capital.

The nomber of the Bank’s shareholders is 1 337.

History


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Basis of Delta Bank

Mission:Delta Banka is aiming to be a leader on the banking market in Serbia, applying the highest world standards in banking services. 

Vision:Basic directions will be development of retail banking, spreading of the net of branches, increasing clients both in domestic and foreign currency businesses, as well as, continuing the co-operation with leading European banks.  Special attention was given to the developing of e-banking, as the basic of banking in the future.

Strategy:Increasing of trust of clients in the long-term stability of the Bank by making public accurate information on its financial balance, especially on its solvency, liquidity and risk management.

Activity: all banking transaction expected and wonted from clients

Imputs come from needs of 200 000 clients


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Basis of Panonska Bank

  • Business policy

    • Achieve positive financial results by preserving the interests of shareholders and adequate provisions for risky loans

    • Improve permanently market options

    • Increase operational profitability, primarily by increasing efficiency and rational utilization of internal resources

  • Business targets

    • Increasing total and particularly dinar balance sheet real potentials, providing high quality (stable and reliable) deposits-savings sources for financing with the emphasis on the dynamic growth of deposits of SMEs, entrepreneurs and citizens, as well as of fixed long term deposits,

    • Promoting credit activities particularly for financing SMEs and citizens,

    • Improving the existing and introducing new banking products and services,

    • Expanding business network and the Bank’s market share,

    • Increasing number of clients and users of domestic payment operations services with the promotion of efficient

  • Gold bases

    • from 1997, gold isground for savings

  • ISO 9001

    • attested from RWTÜV


Parametars of work l.jpg

DeltaBank

Panonska Bank

balance sheet

dinars assets is more then 2.5 bill. dinars(36 mil. €)

assets in € is 4.4 mil.

dinars liability is more then 3.5 bill. dinars(50 mil. €)

liability in € is 3.4 mil.

balance issu

total profit is near 300 mil. dinars (4.25 mil. €)

costs are 430 mil. dinars (more then 6 mil €)

Parametars of work


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Point of Start for CI

  • Independent of history any bank, new age in Serbian economy and banking has started since political change on beginig of new millennium. It means that no one bank has a lot of advantages from self expeirance on new market environment.

  • Many big State’s banks has been closed


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Overview of Banking SectorinSerbia

2002-2003

2001-2002

2003-2004

Privatization

Change structure

“Get real”

Pre-privatization

  • Detailed analyses of the banks by NBS and 3 other advisors

  • Classification of banks in 4 categories

  • Enforcement of regulation

  • Getting full control of majority state owned banks

  • Imposing strict measures to preserve value

  • Appointment of privatization advisors for selected banks

  • Preparing work-out mechanism

  • Liquidation of 19 smaller and 4 large banks

  • Granting 5 Greenfield licenses

  • Amendment of laws and related decisions

  • Carrying out debt-equity swap


Slide9 l.jpg

Number of banks in Serbia since 2001

Number of banks as of Dec 31, 2000

New licenses issued in 2001

Number of banks today*

NBS

  • Criteria

  • Financial standing

  • Liquidity

  • Systematic importance

  • Political importance (number of employees, regional importance)

  • Rehabilitation costs

  • Capability of making profit

No action

28

83 Banks in Serbia

Banks under enhanced supervision

Solvent banks

9

Banks in administration

1

=

48

+ 7

Insolvent banks

BRA

Rehabilitation

3

Liquidation / Bankruptcy

23

18

Mergers& Acquisitions

83

*Excluding Kosovo


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Players

VOJVOĐANSKA BANKA


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Market

  • Delta Banka is an universal commercial bank with Head Office in Belgrade and 160 branch offices in more than 100 towns from all Serbia.

  • There is swiftness and amount of foreign currency payment operations, Delta Banka has made a fruitful cooperation with over 200.000 clients.

  • Delta Banka has a well-developed co-operation with world leading banks. It has correspondent relations with 196 world banks, and in 35 it has Nostro accounts.  Delta Banka has TENFORE real-time and on-line dealing system with Germany.  The Bank is very active on the foreign currency inter-banking market (MTD) and it became a member of ACI - The Financial Market Association.


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Market

  • Headquarters of Panonska Bank is in Novi Sad

  • The Bank has 21 branches end 19 offices in Vojvodina (nord Serbia and Belgrade)


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Rang

  • Participation of State:

    • Komercijalna – 29.08%

    • Vojvodjanska – 98.65%

    • Ju-Bank – 76.49%

    • Novosadska – 67.27%

    • PB Agro Bank – 15.00%

    • Panonska Bank – 82.91%


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Activites of Players

  • Foreign banks are still mainly focusing on their traditional business segment

    • Collection of substantial deposits based on outstanding credibility

    • Focus on selected majority foreign owned companies which entered

    • The country via Greenfield investment or privatization deals

    • Advisory services to the Privatization Agency

    • Organic growth of business activities

    • Trade related activities with only local financing

  • Both, domestic and foreign banks don’t have diversification in activites


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Activites of Players

  • Service range offered by the banks for the time being is a “plain vanilla” one…

    • Currently

      • Current and savings account related services: payments/transfers, short term deposits

      • Credit-debit card

        • still in early phase

      • Loans

        • mainly overdrafts and consumer loans, some car loans, mainly short term corporate loans

      • Trade related activities:

        • mainly L/C and guarantees

          • no customer segmentation

          • mainly one channel of communication

          • simple products

    • To come

      • wider penetration of all the service

      • standing orders

      • medium and long term loans based on FFCS* as well

      • foreign transfers

      • Leasing

      • mortgage loans


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Activites of Delta Bank

  • Retail banking

    • Consumers Loans

    • Payment Cards

    • Savings

    • Domestic & Foreign Currency

    • Safe Boxes

  • Corporate banking

    • Payment Operation

    • Short-Term Loans

    • Long-Term Loans

    • Car Loans

    • Domestic Partners

    • Partners Abroad


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CONSUMER'S LOANS

STUDENT'S LOANS FOR SCHOLARSHIP PAYMENT

ARRANGEMENT CREDITS BASED ON THE CONTRACT ON BUSINESS CO-OPERATION

Payment Cards

Maestro 

Standard 

Gold 

Business 

Visa Electron

Visa Classic 

Visa Gold  

ATM TERMINALS OF DELTA BANKA

SAVINGS

Domestic Currency Savings

Foreign Currency Savings

DOMESTIC & FOREIGN CURRENCY ACTIVITIES

DOMESTIC & FOREIGN CURRENCY ACTIVITIES

Cashing foreign cheques and international P/O

International P/O

Domestic Currency Activities

Current Accounts

Giro-accounts of citizens and undertakers

SAFE-BOXES OF DELTA BANKA

Activites of Delta Bank


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Activites of Panonska Bank

  • Panonska Bank deals with deposits, credits, and other banking activities in the country and abroad

  • The scope of services offered by the Bank includes the following:

    • All types of money deposits

    • Loans and credits

    • Foreign exchange transactions

    • Issuing of shares and bonds and credit cards

    • Money savings and transactions with securities

    • Buying and selling of securities

    • Issuing of certificates, guaranties, and avals

    • Payment operations in the country and abroad

    • Foreign loans


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Activites of Panonska Bank

  • The Bank also performs the following services:

    • Brokerage activities

    • Crediting and debiting operations

    • Pay cards

      • Visa Classic

      • Visa Electron

      • Dina card

      • in arrangement

        • VISA GOLD,

        • VISA BUSINESS SILVER

    • Other financial services

    • Keeping of objects made of gold and other precious metals, jewellery and other valuables.


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Corporate banking of Panonska Bank

  • Short-term loans for:

    • Export financing  

    • Preparation of goods for export  

    • Working assets

    • Buybacks and stocks of finished products and goods 

    • Current liquidity

  • Medium-term and long–term loans for:

    • Fixed assets  

    • Permanent working assets 

    • Housing loans and etc.


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The Balance Sheet Structureof Serbian Banks

ASSETS

LIABILITIES

€10.9 bn

€ 4.8 bn

€ 5.3bn

€10.9 bn

€ 4.8 bn

€ 5.3bn

Capital

Fixed assets

Claims of FRY for FC savings

Long-term provisions

Long-term funds

Liabilities for frozen FC savings

Long term placements

Short-term funds

Short-term placements

Sight-deposits

Cash

*Excluding the 4 largest banks closed on January 3, 2002


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Comparation with Banking Sector in Europe

Banking assets, 2001

In € bn

Banking assets per capita, 2001, in € ‘000

Banks' assets CAGR, 1997-2001


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Expected Potential

Number of credit cards in 000 of customers

GDP per capita in USD

Consumer loans per capita in €

Source:NBS


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Forecast

  • Refering provisinal information, posible to see that Serbian banking is on good way, but still far awey from Europian and not near to banking of neighbourhood countries.

  • Direction of development will be in substantial improvement of banking services:

    • ATMs,

    • POS,

    • E-banking,

    • credit/debt cards,

    • consumer loans ...

  • But, the first job have to be privatisation


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Delta Bank

Delta Bank is aiming to be a leader on the banking market in Serbia, applying the highest world standards in banking services.  Basic directions of development include development of retail banking, further spreading of the net of branches, increasing the circle of depositors and clients both in domestic and foreign currency businesses, as well as, continuing the co-operation with leading European and world banks.  Special attention was given to the developing of e-banking, as the basic of banking in the future.

Panonska Bank

Increasing total and particularly dinar balance sheet real potentials,

The emphasis on the dynamic growth of deposits of small and middle enterprises, entrepreneurs and citizens, as well as of fixed long term deposits,

Promoting credit activities particularly for financing small and middle enterprises and citizens,

Improving the existing and introducing new banking products and services,

Expanding business network and the Bank’s market share,

Increasing number of clients and users of domestic payment operations services with the promotion of efficient

Near future


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Banks’ Focus


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S W O T


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Panonska Bank is one of tipical bank from socialism period. Today, this bank is still in good relationship with current political structur. During leading politics, the Bank will have good business, but can not say that has good future.

Delta Bank is part of strong group of known companies. Has good image and can expected nice future.

For presentation, we chose two of more important domestic banks because we’d like to show totaly diferent approach to business.

Conclusion


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Sources

  • Personal contact with managers of banks

  • Sites:

    • www.panban.co.yu

    • www.gov.yu

    • www.ssinf.sv.gov.yu

    • www.mfa.gov.yu

    • www.srbija.sr.gov.yu

    • www.mier.sr.gov.yu

    • www.mfin.sr.gov.yu

    • www.mpriv.sr.gov.yu

    • www.belex.co.yu

    • www.bra.gov.yu

    • www.priv.yu

    • www.nbs.yu

    • www.pks.sv.gov.yu

    • www.finnet.co.yu/ubj/ubj.htm

    • www.thebanker.com


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Authors

  • Zlatko Mitic,

    R&D Manager, Sintelon R&C - floor coverings producer

  • Velibor Raicevic,

    Menager of publicly municipal enterprise

  • Milica Radoicic,

    Proxy of manager inpublicly municipal enterprise

  • Vladimir Bjelovic,

    Manager of gas distribution enterprise

  • Darko Medjedovic,

    Manager of local electro distribution

  • Zoran Skuban

    Manager in Vital, food producer


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