BELGRADE (Reuters) – Serbian banks reported yesterday a cumulative 1.113-billion-dinar ($19.23 million) loss for 2003, considered a success after the sector lost $470.5 million in 2002. The Serbian Bank Association said the 44-strong industry would have reported a profit had it not been for 11 smaller banks which had to consolidate their balance sheets and write off bad loans under international accounting standards as they prepared for privatizations and mergers. The central bank obliged banks to report their 2003 results according to international standards. Corporates will follow suit this year. «The environment in which the banks did business last year was unfavorable, with low 1.5 percent GDP growth, a 3 percent decline in industry, falling exports and rising imports. Still, the situation was much better than in 2002,» Secretary-General of the Serbian Bank Association Veroljub Dugalic said. Overall, banks were considered to be fairly healthy and liquid, despite still facing high credit, investment and political risk and limited competition, he said addressing the annual bankers meeting. Dugalic said banks managed to boost their capital to a cumulative 81.72 billion Yugoslav dinars ($1.41 billion) up on 61.03 billion dinars in 2002, roughly in line with previous central bank expectations. Banks were required to boost their founding capital by the end of 2003 to 10.0 million euros ($11.83 million) and only two reporting banks failed to meet the requirement, Dugalic said. Central bank Governor Radovan Jelasic urged the banks whose capital stood close to the limit to start looking for a merger possibility. «The 10.0-million-euro capital is an important issue for all banks. Those on the verge of that figure should quickly start looking for partners both at home and abroad. Unfortunately, there are not as many foreign banks interested in Serbia as we would like to see,» Jelasic told the meeting. The value of bank balances rose 15 percent to $6.0 billion. Serbia plans to launch international tenders for the sale of three Serbian banks – Jubanka, Novosadska Banka and Continental Banka – later this year, hoping to earn a total of some 200 million euros.