The growing trade links between Russia and Serbia are likely to lead to a greater Russian presence in the Balkan country’s banking sector. That is the view of Alexei Sytnikov, vice-president of Bank of Moscow, Russia’s fifth-largest banking group by assets, which has established a wholly owned subsidiary in the Serbian capital Belgrade with an initial investment of €15 million. "We believe that the probability of other Russian players entering the Serbian market is very high," says Sytnikov, who is responsible for Bank of Moscow’s international banks. He adds that all the prerequisites for Russian banks, most likely from among the top 30 players, are in place for them to look to set up subsidiaries in Serbia – strong economic growth, a relatively low level of competition in the financial services sector and a growing Russian business presence.
As Sytnikov points out, Serbia’s economy continues to grow strongly. GDP growth in 2007 was 7.5%, exceeding the 5.7% figure for 2006. And in the first quarter of 2008, he says that the country established itself as the regional leader in the Balkans in economic growth terms, with GDP rising by 8.2%. And with more than 7 million inhabitants, Serbia is the most populous of the former Yugoslav republics, making it an attractive market from a retail banking perspective.