Republic of Serbia to become majority owner of Komercijalna Banka?

Although the deadline for the sale of Komercijalna Banka expires soon, there’s a possibility of the Republic of Serbia becoming its majority owner instead of a private company.

The Government of Serbia and the IMF agreed several months ago for the state to put Komercijalna Banka up for sale before June 30, 2019, and sell it by the end of 2019. This scenario, however, is not certain to take place.

As Blic learns, the state might keep its share and even increase it by paying out other shareholders. Practically, Serbia, which owns a 41.7% stake in Komercijalna Banka, would buy the 24.4% stake belonging to the European Bank for Reconstruction and Development (EBRD) and the 10% stake owned by the World Bank, that is, the IFC, one of its branches.

– Komercijalna Banka would therefore become the largest state bank in Serbia, which would cost the state a lot. The government would have to pay the shareholders a guaranteed amount of EUR 252 million from the budget, as specified in the 2006 agreement, under which the shareholders of Komercijalna Banka, namely, the EBRD, the IFC, SwedFund and Germany’s DEG, have the right of activating the so-called “put option” if the state doesn’t initiate the sale of Komercijalna Banka, as they invested EUR 170 million in its shares between 2006 and 2009. The activation of this option would mean that the state is obligated to buy their shares at a previously determined price if they want to sell them, and they do and have said so publically on several occasions – the Blic source says.

Milojko Arsic, a professor at the Faculty of Economics, says that, if the state were to give up on the privatization, it would cost Serbia a lot.

– Serbia has shown that it is bad at managing companies and banks and that banks are often used to finance favored businessmen, which leads to NPLs and banks’ ruination. There have been several examples of banks being closed in the past years, costing us a billion euros in total. In a country where corruption is so high, privatization is a better option for banks – Arsic said and added that, in case Komercijalna Banka is sold, Serbia would do well to keep Postanska Stedionica in its ownership, as it has the most developed retail business.

NLB Komercijalna banka AD Beograd

Banka Poštanska štedionica a.d. Beograd

Vlada Republike Srbije

Međunarodni monetarni fond-MMF Beograd

EBRD Evropska banka za obnovu i razvoj Beograd

IFC

International Finance Corporation USA

Ekonomski fakultet Beograd

Komercijalna Banka

Postanska Stedonica

Government of Serbia

International Monetary Fund

IMF

European Bank for Reconstruction and Development

EBRD

International Finance Corporation

IFC

SwedFund

DEG Germany

Faculty of Economics

Milojko Arsic

sale of Komercijalna Banka

sale of state share in Komercijalna Banka

Komercijalna Banka ownership structure