Bosnia-Herzegovina is out of recession - that is the good news. But growth is still slow and struggling to improve on the back of a very high unemployment rate of more than 25%. The population's purchasing power is low, with average earnings of €400 a month and pension payments of between €150 and €170. The banking sector also suffered in 2013, largely due to a clear out of the balance sheets of two banks. Return on equity fell to -0.2%. Still, Intesa Sanpaolo, the fifth largest bank in the country by assets, expects growth in the major banking business of loans and deposits. "We expect to see an increase of 15% to 20% in our total assets over the next three to four years," says Dario Grassani, chief financial officer of Intesa Sanpaolo Banka BiH. "Our expansion strategy is relatively prudent; not based on an aggressive approach, but in line with the forecast growth of GDP [gross domestic product] of the general economy or slightly higher." This should also mean an improvement on Intesa's return-on-equity ratio from 9% to 10%, says Mr Grassani.
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