Collection management model for corporate clients in the Serbian banking sector

Collection management is the key element of credit risk management. Therefore, successful collection management is one of the most important tasks of any bank. This paper analyses the results of collection management models applied in Erste bank a.d, Novi Sad and Banca Intesa a.d., Belgrade since 2010. The main hypothesis is that good collection management model provides a satisfactory level of NPLs and bank profitability, which shall be further supported by this research. NPL of BI amounted to 6.67%, while EB had NPLs in the amount of 17.67%, which is lower than the average NPL rate of the Serbian banking sector of 21.4% (in 2013). Furthermore, ROE of BI was 8.7%, while EB had ROE of 10.42%, which is higher than the average ROE of 3.81% of the Serbian banking sector (in 2013). Finally, future research shall be directed towards comparing the results of both banks with the results of the parent banking groups in Austria and Italy i.e. the European Union.