Hello? We would like to buy a bank as well – After Telenor, Telekom Srbija also wants to enter financial sector

After a few months ago, Telenor took over the KBC bank’s license; Telekom Srbija decided to have its share in the financial market as well.

As the company announced, their Executive Board considered an option to cooperate with Dunav banka which works with the namesake insurance company.

– We are analyzing an option of additional profit sources, mobile banking being one of them. It does not comprise only mobile electronic payments but offers a wider range of services, Therefore, we are considering an option for some kind of connection with some of the banks in Serbia and in that context, and our Executive Board has considered cooperation with Dunav bank – Telekom announced yesterday.

The company neglected that the purchase of a bank had already been agreed as some media announced.

For wider public, Dunav bank is not so familiar name so the question popped up why Telekom opted for cooperation with it.

- Size, scope of business and technical equipment of Dunav bank are, among other things, reasons why cooperation with them was considered which does not exclude cooperation with other banks as well – Telekom Srbija says.

It seems that mobile operators‘market breakthrough is becoming a trend. Experts say that in the next couple of years, merge of services offered by banks and mobile operators is likely to happen which would completely change banking market. More precisely, it is expected that telecommunications operators start offering banking services over the phone to greater extent, i.e. so-called mobile banking. The fact that Serbia has ten million active mobile phones favors it. Then, taking into account insufficient development level of fixed network, in some parts of Serbia mobile phones are the only connection with the world. Apart from that, it is a trend that mobile phones are more used for Internet access which also benefits to mobile banking and payments over the phone.

Banks - favorable catches

The Minister of Finance, Lazar Krstic, announced yesterday for journalists at Kopaonik that he found out in media about the intention of majority state-owned Telekom to buy Dunav bank which is also state-owned company. He estimated this acquisition would be beneficial for national telecommunications company if it would increase its competitiveness and market value.

Krstic said that Telekom Srbija is not the only telecommunications company which is planning to buy a bank or its license.

Positions strengthening

Miroslav Radakovic, the main broker at Sinteza Invest Group, reminds that Dunav is rather a small bank which, despite low market share, generates positive result.

- I think this bank can fit well into Telekom’s development strategy because in this industry for some time, there has been a trend of expansion to financial sector due to potential of synergy which can thus be generated.

Radakovic reminds that in the past year, Telekom Srbija significantly decreased its debts, which is the reason why he does not expect that this relatively small acquisition can endanger company financial position.

In a word, if Telekom would take over Dunav bank at the end, it could maintain the mobile telephony market leading position. According to last year’s profit and loss first data, a profit of RSD 15.3 billion, or 36% more than in 2012, guarantees that it will have sufficient funds to keep up with it.

The report data show that RSD 14.3 billion was poured in the republic budget out of the total profit while shareholders received temporary dividends totaling somewhat more than RSD 7.5 billion.

According to the official data, Dunav bank, whose majority owner is Dunav osiguranje (a stake of 58.7%), Dunav reosiguranje has 13.8% shares, Srbijagas 5%, while four companies on whose shares a first range mortgage has been places, own some 15%. These companies are Koteks and Lavera, owned by Goran Percevic, as well as Prologistic and Nordvik.

Jelena Djelic