Postanska Stedionica Bank Negotiating About Purchasing Prva Banka Crne Gore

Banka Postanska Stedionica a.d. Beograd, whose majority owner is the Government of Serbia, could become the owner of Prva Banka Crne Gore, whose biggest individual shareholder at the moment is Aco Djukanovic, the brother of the former president of Montenegro, Milo Djukanovic. This has been confirmed for the RTCG Portal. Acquisition negotiations are in the final phase, the portal learns.

Postanska Stedionica, whose full legal name is Banka Postanska Stedionica a.d. Beograd, is one of the biggest banks in Serbia. It was founded in 1921, with the seat in Belgrade. Since April 2022, it has been the only bank operating in the Serbian market whose majority owner is the Government of Serbia.

Earlier yesterday, the Nova.rs portal reported that intensive acquisition negotiations were in progress. For months now, there have been speculations about the bank, whose losses number in millions, being bought by somebody from the region or Europe, and if the negotiations go as planned, it could be Serbia, through one of the banks in which it has the majority share.

As Nova.rs writes, for several months now, there have been negotiations about the purchase of Prva Banka, that is, a majority stake.

As they write, the executive director of Prva Banka, Tarik Telacevic visited Belgrade on Tuesday, July 4, where he presented the business balances and other important information about the bank.

Prva Banka is a JSC, and 41.46% of the shares is owned by Aco Djukanovic.

Why does Serbia want the Montenegrin bank?

The main reason for the purchase of Prva Banka, according to Nova.rs, is to establish direct payment transactions between Serbia and Montenegro.

Also, the portal adds, Serbia is interested in purchasing the shares that Elektroprivreda Crne Gore (EPCG) has in this bank, and it’s a 19.75% stake.

In addition to that, Prva Banka has a developed infrastructure which would act as support to payment transactions between Serbia and Montenegro.

Also, the annual exchange of goods and services between Serbia and Montenegro is around EUR 1 billion, and payments in line with the current system are done through correspondent banks, which, of course, increases the costs of those transactions.

What are the next steps?

According to the portal, in the next period, regulatory organs are expected to give approval. Following that, the realization process itself should start. That’s when Serbia would become the owner of Prva Banka.

– This job would mean the first serious entry of Serbia to the market of Montenegro and thereby mark the beginning of a new era in the mutual relations, so it’s clear that this transaction also has political, and not just economic, motives behind it – writes the Nova.rs portal.

Failure of Prva Banka

In the financial report that was published on the website of the Montenegrin Stock Exchange in May, the auditor said that there was an interest in purchasing a majority stake in the bank by “strategic investors from Europe and the region.”

The auditor determined that several items in the reports of Prva Banka were not true and that they needed to be corrected, as well as that, according to those parameters, the bank now had a total capital adequacy ratio of 13.39% (whereas the proscribed limit is 10.63%), 9.77% for the total share capital (proscribed limit 8.63%) and 9.77% for the regular capital (proscribed limit 4.5%).

He also said that, according to the bank’s management, “soon there may be the realization of one of the offers” for its sale, whereby “the necessary conditions for the survival and further development of the bank would be created.”

At the end of last year, Prva Banka had an accumulated loss of as much as EUR 32 million.

The auditor also said that the amount of the acquired property had been undervalued by 1.35 million in the reports and that the 2022 result had consequently been overvalued by EUR 541,000.

Banka Poštanska štedionica Beograd

Elektroprivreda Crne Gore

EPCG

Government of Serbia

Prva banke Crne Gore

Aco Đukanović

Milo Đukanović

Tarik Telaćević

purchase of Prva banka

acquisition of Prva banka