Belgium’s plucky banks are breaking out of their country’s borders to challenge global competitors in the emerging markets of central Europe and beyond. The top three players, who account for about 80% of Belgium’s banking system, are feeling the pinch from a relatively small and highly competitive market with some of Europe’s lowest net interest margins.
“This is one of the most competitive systems in Europe, especially on net interest margins, which are among the lowest in Europe,” says Elisabeth Grandin, a director at Standard & Poor’s. “In addition to fierce competition on loans granted to clients, net interest margins are low because, on average, a significant proportion of the banks’ balance sheet is made up of low-yield assets, government bonds and so on.”
