Competitive Business Case
MBA – March 2004
Delta Bank vs Panonska Bank
0
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
1
History
– The Bank is part of Delta
Holding and was
established in
16/10/1991.
– Delta Bank is private bank
– was established in 1974 year
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.
2
Basis of Delta Bank
MISSION
Mission: Delta Banka is aiming to be a leader on the
banking market in Serbia, applying the highest world
standards in banking services.
VISION
Strategy
Activity
Imputs
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
Potential clients
Imputs come from needs of3
200 000 clients
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 is ground for savings
ISO 9001
– attested from RWTÜV
4
Parametars of work
Delta Bank
Panonska Bank
STATEMENT OF INCOME
balance sheet
Year Ended December 31, 2003
(Thousands of dinars)
INCOME FROM ORDINARY
OPERATIONS
1,695,832
BALANCE SHEET
As of December 31, 2003
(Thousands of dinars)
Property and equipment
Total Assets
2,843,163
43,937,824
LIABILITIES AND SHAREHOLDERS'
EQUITY
Total Liabilities
37,298,665
Shareholders’ Equity
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
– 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 €)
6,639,159
43,937,824
5
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
6
Overview of Banking Sector in Serbia
2001 - 2002
“Get real”
2002 - 2003
Change structure
2003 - 2004
Pre-privatization
• Detailed analyses of
the banks by NBS
and 3 other advisors
• Liquidation of 19
smaller and 4
large banks
• Getting full control of
majority state owned
banks
• Classification of
banks in 4
categories
• Granting 5
Greenfield
licenses
• Enforcement of
regulation
• Imposing strict
measures to preserve
value
• Amendment of
laws and related
decisions
• Appointment of
privatization advisors
for selected banks
• Carrying out debtequity swap
• Preparing work-out
mechanism
Privatization
7
Number of banks in Serbia since 2001
Number of
banks as
of Dec 31,
2000
New
Number of
licenses
banks
issued in
today*
2001
NBS
Criteria
No action
28
Banks under
enhanced
supervision
9
• Political importance
(number of
employees,
regional
importance)
Banks in
administration
1
• Rehabilitation costs
Rehabilitation
3
Liquidation /
Bankruptcy
23
• Financial standing
• Liquidity
Solvent
banks
83 Banks in
Serbia
Insolvent
banks
• Systematic
importance
• Capability of
making profit
+7
=
48
BRA
Mergers & Acquisitions
18
83
8
*Excluding Kosovo
Players
VOJVOĐANSKA BANKA
Privredna banka Beograd AD
9
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 cooperation 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.
10
Market
• Headquarters of Panonska
Bank is in Novi Sad
• The Bank has 21 branches
end 19 offices in Vojvodina
(nord Serbia and Belgrade)
11
Rang
Bilance in mill. dinars
50
44.2 43.9
40
39.8
31.7
30
15.4
20
12.7 12.4 12.2
9.8
10
8.9
8.3
8.3
8
7.8
7.7
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0
• 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%
12
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
13
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
14
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
15
Activites of Delta Bank
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
16
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
17
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.
18
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.
19
The Balance Sheet Structure of Serbian Banks
ASSETS
Fixed assets
Claims of
FRY for FC
savings
€10.9 bn
€ 4.8 bn
2.5%
4.7%
24.0%
22.9%
LIABILITIES
€ 5.3bn
€10.9 bn
6.6%
26.5%
2.8%
8.7%
23.0%
15.8%
54.8%
37.5%
19.2%
Cash
6.7%
А 2000
Long-term
provisions
9.9%
24.1%
44.7%
19.5%
8.3%
47.7%
Short-term
placements
€ 5.3bn
Capital
21.4%
Long term
placements
€ 4.8 bn
11.2%
Long-term
funds
18.9%
Liabilities for
frozen FC
savings
14.8%
12.0%
Short-term
funds
40.4%
11.1%
13.6%
12.0%
9.8%
А 2001*
A2002
L 2000
24.9%
L 2001*
Sight-deposits
L2002
20
*Excluding the 4 largest banks closed on January 3, 2002
Comparation with Banking Sector in Europe
Banking assets, 2001
Banking assets per capita,
2001, in € ‘000
In € bn
Belgium
80.2
348
Austria
266
Portugal
130
Croatia
88
11.4
5.6
5.6
4.5
78
3.8
Poland
73
3.7
42
7.1
17.4
Hungary
Serbia
10.6
25.8
146
Czech Republic
6.6
29.0
156
Greece
3.1
69.2
253
Spain
Banks' assets CAGR,
1997-2001
0.6
11.1
20.7
-47.6
21
Expected Potential
1,850
Number of credit cards
in 000 of customers
GDP per capita in USD
550
200
2,404
20
32
60
1999
2000
2001
2002
2003e
2004e
1,925
Consumer loans per capita in €
1,424
1,397
15.89
976
1999
2000
2001
2002
2003e
4.95
5.72
3.72
1999
Source:NBS
2000
2001
2002
0.00
0.00
2003e
2004e
22
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
23
Near future
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
24
promotion of efficient
Banks’ Focus
Panonska
increase of capital lode potential foreign currency credit portfolio card traffic
year
%
%
savings
%
%
%
2003/2002
153
123
152
269
110
2004/2003
130
125
145
180
130
2005/2004
120
125
140
150
150
2006/2005
115
130
140
100
175
Delta
increase of capital lode potential foreign currency credit portfolio card traffic
year
%
%
savings
%
%
%
2003/2002
150
200
200
150
2004/2003
125
175
175
150
120
2005/2004
115
150
150
140
150
2006/2005
110
125
130
135
170
25
SWOT
Strengths
Weaknesses
Opportunities
Threats
Delta Bank
Panonska Bank
Part of Delta Holding – group of
developed companies
Big network of offices
correspondent relationships with
more of 300 foreign banks
Internet banking
Permanent education of
employees
for savings longer then 1 year,
gold is ground
Brend depend of strengths of
companies from Astra (BK) Group
Small No of offices on market
Doesn’t have business in abroad
Name link only for small area
Less big & strong states banks
One of leaders domestic bank –
our people believe to leaders
level of compulsory reserves
with National Bank of Serbia
Good relationship with leading
political structure
Entry of strong foreign banks
Too large too manage
Entry of strong foreign banks
Recruitment of private banks
26
Conclusion
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.
27
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
28
Authors
Zlatko Mitic,
R&D Manager, Sintelon R&C floor coverings producer
Velibor Raicevic,
Menager of publicly municipal
enterprise
Milica Radoicic,
Proxy of manager in publicly
municipal enterprise
Vladimir Bjelovic,
Manager of gas distribution
enterprise
Darko Medjedovic,
Manager of local electro
distribution
Zoran Skuban
Manager in Vital, food producer
29