Bosnia, officially known as Bosnia and Herzegovina (BiH), is a small nation located in Southeastern Europe, characterized by a rich history, diverse culture, and stunning natural scenery.Bosnia applied for EU membership in February 2016 and was recognized as an EU candidate in December 2022. The country maintains its national currency, the Convertible Mark (BAM), which is pegged to the euro through a currency board arrangement within the Central Bank of BiH (1 EUR = 1.95583 BAM). This currency peg maintains confidence in the currency and facilitates reliable trade links with European partners.
The Bosnian banking sector bears resemblance to other Balkan countries: it is relatively compact, characterized by a limited number of banks focused on domestic retail and business banking, highly concentrated, and marked by substantial foreign capital presence. While primarily serving local customers, Bosnian banks also cater to international clients, and offer a range of banking services in foreign currencies. IBAN system is used in Bosnia to identify accounts, facilitating international payments.
The Bosnian banking sector primarily consists of universal commercial banks that offer a range of products and services in both retail and business banking. There is one specialized state-owned development bank, Razvojna Banka Federacije BiH.Deposits remain the main source of funding for Bosnian banks, comprising 82.34 % of consolidated total liabilities. The average loan-to-deposit ratio remains quite low (73.12 %), indicating a prudent approach to financing and highlighting the self-funding capability of Bosnian banks.
The consolidated banking assets to gross domestic product ratio indicates that the Bosnian banking sector is almost twice less than the national economy (60.86 %).
As of 2023, Bosnia was home to 13 banks, including 4 domestic banks and 9 foreign-controlled banks. Given that there are more foreign-controlled banks than domestic ones, it is not surprising that the latter commands a significantly smaller market share (16.91 % domestic banks vs 83.09 % foreign-controlled banks). These foreign-controlled banks mainly originate from various European countries such as Italy, Austria, Slovenia, Saudi Arabia, Turkey, Germany.
Bosnian banks operate as universal banks, serving domestic retail and business clients. Most of the banks offer multi-currency products (accounts, savings, and loans), which are available online to Bosnian customers. The EUR is the most popular foreign currency for denominating banking products (EUR payment cards and ATMs are available), followed by the USD and other G-10 currencies.
In 2023 and 2022, all 13 banks reported a net profit, Additionally, 12 banks witnessed an increase in total assets, while 1 bank reported a decrease.
Since 2021, 2 banks has ceased operations, no new banks has been opened.
| Rank | Name | Total Assets | Market Share | Loans to Deposits | Country of Origin |
|---|---|---|---|---|---|
| 1 |  UniCredit Bank d.d. Mostar | 7205.73 | 24.83% | 68.64 % |  Italy |
| 2 |  Raiffeisen Bank d.d. BiH | 5212.77 | 17.96% | 68.43 % |  Austria |
| 3 | ASA Banka d.d. Sarajevo | 3031.41 | 10.44% | 70.94 % |  Bosnia and Herzegovina |
| 4 |  Intesa Sanpaolo Banka d.d. Bosna i Hercegovina | 2620.82 | 9.03% | 86.68 % | Italy |
| 5 |  Sparkasse Bank d.d. BiH | 2265.89 | 7.81% | 79.87 % | Austria |
| 6 |  NLB Banka d.d. Sarajevo | 1792.92 | 6.18% | 79.20 % |  Slovenia |
| 7 |  Bosna Bank International d.d. Sarajevo | 1546.52 | 5.33% | 75.07 % |  Saudi Arabia |
| 8 |  ZiraatBank BH d.d. | 1429.04 | 4.92% | 95.79 % |  Turkey |
| 9 |  Addiko bank d.d. Sarajevo | 1120.29 | 3.86% | 64.07 % | Austria |
| 10 |  Union banka d.d. Sarajevo | 1114.89 | 3.84% | 53.28 % | Bosnia and Herzegovina |
| 11 |  ProCredit Bank d.d. Sarajevo | 921.42 | 3.17% | 80.46 % |  Germany |
| 12 |  Privredna banka Sarajevo d.d. Sarajevo | 635.32 | 2.19% | 72.61 % | Bosnia and Herzegovina |
| 13 |  Komercijalno-investiciona banka d.d. V.Kladuša | 128.57 | 0.44% | 58.02 % | Bosnia and Herzegovina |
All the data are for 2023. Total assets and net income are provided in BAM million.
The Herfindahl–Hirschman Index (HHI) calculated for the Bosnian banking sector suggests that the sector is moderately concentrated (HHI = 0.13). This is also evident from the market shares of the largest Bosnian banks: the 5 largest banks operating in Bosnia (out of 13 banks) collectively hold around 70% of the consolidated banking assets, each having more than a 8% market share. Remarkably, only one of these banks, ASA Banka d.d. Sarajevo, has 100% Bosnian capital, while the remaining four are foreign-controlled banks originating from Austria or Italy.
The 3 largest banks - UniCredit Bank, Raiffeisen Bank and ASA Banka - have shown steady asset growth since 2018. While UniCredit and Raiffeisen have been growing organically, ASA Banka's growth is attributed to its recent acquisitions: Vakufska Banka in 2021 and Sberbank BH in 2022. UniCredit and Raiffeisen had a drop in net income during the pandemic, but swiftly recovered to the pre-COVID income level and continued income growth further. ASA Banka witnessed a sharp income increase after the acquisitions.
Vakufska banka d.d. Sarajevo was established in 1992 as a private commercial bank. Vakufska banka d.d. Sarajevo operated as a universal bank providing retail, business, corporate and investment banking products and services.
On 24 November 2021, the Banking Agency of the Federation of Bosnia and Herzegovina revoked the license issued to Vakufska banka d.d. Sarajevo. As of 1 December 2021, all rights and obligations of Vakufska banka d.d. Sarajevo were transferred to ASA bank d.d. Sarajevo.
Vakufska banka d.d. Sarajevo was the 14th largest bank in Bosnia and Herzegovina in terms of total assets. In 2020 its total assets were 296,65 mln BAM, providing the bank with the market share of 1.22%. In 2020 the bank's net income was 1,87 mln BAM.
Sberbank Europe AG is a banking group 100%-owned by Sberbank Russia, the largest Russian banking group. In 2012 Sberbank Russia acquired international banking division of Volksbank (Austria) and rebranded it to Sberbank Europe. Sberbank Europe is focused on providing corporate banking products and services. Sberbank BH d.d. Sarajevo operates as a subsidiary of Sberbank Europe AG. In March 2022, Sberbank BH d.d. Sarajevo was acquired by ASA bank d.d. Sarajevo.
Sberbank BH d.d. Sarajevo was the 5th largest bank in Bosnia and Herzegovina in terms of total assets. In 2021 its total assets were 1 625,12 mln BAM, providing the bank with the market share of 6.28%. In 2021 the bank's net income was 20,10 mln BAM.
