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| Author: | Repansek, B. |
| Title: | Cost of financial intermediation in Slovene banking in 1994 |
| Journal: | Bancni vestnik
1995 : VOL. 44:9, p. 5-13 |
| Index terms: | SLOVENIA BANKING COMMERCIAL BANKS SAVINGS BANKS FINANCIAL INTERMEDIARIES COSTS |
| Language: | slv |
| Abstract: | In his article the author analyses the level of interest margins and financial intermediation margins in selected European countries, above all in the neighbouring countries of Austria and Italy, and compares them to the same in Slovenia.It is established that in 1992 banks in Austria operated at a margin which was 100 % lower than that in Italy.The cost of labour was also 100% lower than in Italian banks.In 1994 the margin on financial intermediation of commercial banks in Slovenia was two times lower than the margin on financial intermediation of savings and loan services, and approximately three times lower than the margin on intermediation of savings banks.Almost three quarters of the margin on financial intermediatmon of commercial banks were used to cover operational costs.Since in 1994 the total net provision of commercial banks exceeded their total income, banks as a group experienced a Ioss already before tax.A comparison between the margin on financial intermediation and the level of operational costs shows that the lowest net income was created by the group of small commercial banks.In spite of certain differences in the methods used and unavailability of data for 1994, the author establishes that the level of average costs of financial intermediation in Slovenia is comparable to that of the developed European countries.However, the author points out that the offer of foreign financial intermediaries in the Slovene market is non-existent and that international competition will demand various forms of adjustment on the side of Slovene intermediaries.This is specially true of Slovene savings banks, since the costs of their financial intermediation, if compared to other domestic and some foreign financial intermediaries, are relatively high. |
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