UniCredit Bank Delegation Visits Central Bank of Bosnia and Herzegovina

Governor of the Central Bank of Bosnia and Herzegovina (CBBiH) Dr. Kemal Kozarić and Vice Governor of CBBiH Dr. Radomir Božić today, July 13, 2015, received a high-ranking delegation from the UniCredit Group from the Republic of Italy, led by Federico Ghizzoni, CEO of the UniCredit Group, accompanied by Carlo Vivaldi, Head of the UniCredit Group for Central and Eastern Europe, and Giuseppe Scognamiglio, Head of the UniCredit Group for relations with international institutions, the CBBiH announced, as reported by the Bosnian news agency Patria.

In addition, the delegation included the directors of UniCredit banks in Bosnia and Herzegovina, Ivan Vlaho and Dalibor Ćubela.

Representatives of the Italian banking group expressed satisfaction with the results achieved by their banks in Bosnia and Herzegovina, but emphasized that there is always room for improving cooperation. The bank delegation will hold a number of meetings with representatives of the economy and authorities to examine the potential for further expansion of cooperation.

One of the topics discussed was the macroeconomic environment in Bosnia and Herzegovina, where UniCredit bank representatives noted that the monetary policy model under the currency board arrangement has proven extremely beneficial, as it has eliminated foreign exchange risk from operations. However, the governor highlighted the fact that despite the highly rated stability of the sector, where bank capitalization is a high 17%, credit growth is extremely low, at around 4%.

- This is insufficient for any serious investment cycle. Banks hold nearly one billion EUR above the required reserve level, and it would be desirable to find a way to launch an investment cycle that would result in new jobs - said Governor Kozarić, recalling the worst macroeconomic indicator of Bosnia and Herzegovina – unemployment of 27.5%. UniCredit bank representatives emphasized that there is liquidity in the market and there are institutions willing to invest, but stability that must be permanent is necessary.

During the discussion, the high level of non-performing loans (NPLs) was mentioned, which at the level of the banking sector in the country amounts to 14%.

- The new Law on Banks will facilitate easier resolution of this problem, and in the near future we expect a reduction in this percentage - the governor emphasized.

At the end of the meeting, representatives of the UniCredit Group once again emphasized their commitment to the market of Bosnia and Herzegovina and announced new investments.