Serbian banks sharpen focus on real estate financing in H1 - KPMG

Serbian banks sharpen focus on real estate financing in H1 - KPMG License: CC0 Creative Commons

BELGRADE (Serbia), October 12 (SeeNews) - Serbian banks have slightly sharpened their focus on real estate financing in the first half of 2017, compared to the prior-year period, according to the Property Lending Barometer 2017 survey of KPMG.

Serbian banks are open to providing financing to both new development and income-generating properties, as 75% of respondents reported that there is a slight increase in focus on real estate financing compared to one year ago, KPMG said in the survey.

"Given the overall optimistic outlook, lenders seem to be capable to support significantly larger projects in the real estate," the head of audit of KPMG in Serbia, James Thornley, said.

The majority of the surveyed banks have confirmed that real estate financing is moderately important from a strategic point of view, while 25% consider it important. The great majority of real estate loans provided by the surveyed banks during the last 12-18 months were given for new developments, KPMG said. 

As many as 75% of the respondents said the level of provisions against real estate loans was adequate, while 25% stated that they were too low. The average deal/loan size provided by the responding banks is between 10 million euro ($11.8 million) and 13 million euro, while their preferred loan size would range from 11 million euro to 28 million euro.

Expectations concerning the size of the Serbian bank’s real estate loan portfolio in the next 12-18 months are positive, as all of the respondents foresee an increase not only for the banking sector as a whole but also for their own institutions.

($ = 0.844124 euro)

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