The Banking Environment
Economic and political environment
Belgium was a founder member of the euro.
Belgium is a federal country, consisting of the regions of Flanders, Wallonia and Brussels. The country has a population of about 10,2 million. Flanders, the northern, Dutch-speaking part of the country, counts almost 6 million inhabitants. Wallonia, the southern, French-speaking part of the country, has a population of 3,3 million. Brussels, the bilingual capital of the country, falls just short of 1 million inhabitants. The central government is responsible for fiscal, financial, social and employment policy, foreign affairs, debt management, etc. The regional governments have large autonomy in environmental, educational and cultural matters.
As a small, open economy that exports about 75 % of its GDP, Belgium was one of the founder members of the European Economic Community in 1957 together with Germany, Italy, France, the Netherlands and Luxemburg. The European Economic Community has, since then, evolved to the European Union and now consists of 15 member states. In 1990 Belgium linked up its currency, the Belgian Franc, formally to the German Mark. Since January 1999 Belgium is part of the Economic and Monetary Union together with ten other European countries. Its official currency now is the Euro and its monetary policy is being set by the European Central Bank.
Per capita GDP is USD22,000. The EU is the most important trading market with Netherlands, Germany, France and the UK the main individual partners.
Banking in general
Supervision of the banking sector is not a task of the central bank of Belgium (the “Nationale Bank van België” or NBB) but of the Banking and Finance Commission (the “Commissie voor Bank- en Financiewezen”).
The NBB is the Belgium member of the European System of Central Banks.
The 1997-1998 wave of consolidation leaves the Belgian banking sector concentrated around a handful of key players. The five biggest institutions account for more than 85% of total assets of the banking sector. Fortis Bank is the largest bank and is the result of the merger of Générale de Banque with Fortis’s banking affiliate ASLK-CGER. It has a market share of around 28% in credits to the private sector. Second in line is KBC Bank (the product of the merger of CERA Bank with Kredietbank) with a market share of around 20% in credits to the private sector. The third player, BBL, is part of the Dutch financial group ING. As a whole, Belgian banks remain sound due to the conservative structure of their balance sheets and their prudent management. Domestic asset quality has reached its peak. Finally, bancassurance (selling insurance products through bank branches) is very successful in Belgium: the 3 top institutions all adopt this strategy and are part of a larger integrated financial services group.
The environment is very open, banking fees are generally low and automation is high, particularly in the domestic business.
Accounts are available in EUR and foreign currency, and can have a credit line attached.
If no credit line is attached, it is referred to as a Transaction account (e.g. the KBC-transaction account).
Non-residents frequently hold a Collection account, an account of a non-resident for collecting money due from Belgium companies and to transfer it to an account in the homeland of the account holder.
Deposit accounts are readily available in EUR and foreign currency.
Currency
The Euro.