There are 28 banks currently operating in Serbia, and for some, it is quite certain that they will change owners this year.
The sale of Russian VTB Bank branch in Serbia and the privatization of Komercijalna Banka are ongoing, while Telenor Bank is waiting for the approval from the National Bank of Serbia to be sold.
Overall, the banking sector recorded a profit of 63.6 billion dinars last year, which was the best result since 2008. Nevertheless, in the operating segment, the net interest revenue decreased by 2.4%, while other operating income of banks increased 3.3 times to 20.5 billion dinars and were largely the result of changes in balance sheets after the takeovers.
“In addition, the significantly slower write-offs of problematic loans compared to previous years, as well as the collection of certain impaired placements, have drastically affected the end results of the banking sector. Last year, only seven banks recorded negative operations. The trend of the larger banks dominating the market continued in 2017, with the top ten banks having over an 80 percent market share”, Biznis i Finansije magazine reports.
The magazine goes on to say changes in ownership are inevitable.
Russia’s Vneshtorgbank (VTB) plans to withdraw from the Serbian market, VTB CEO Andrei Kostin announced Thursday. He told a press conference in Moscow that VTB also intended to leave the markets of India and Vietnam. “We are considering the possibility of shutting down the business in several locations, including Serbia, India and Vietnam. We have no plans to develop our operations in Western Europe”, Kostin said and added that VTB “today sees no prospects of pursuing development in that direction”. Kostin noted that the Bank intended to develop business in China and CIS countries. Russian VTB Bank officially began business activities in Serbia on 16th September, 2013, after it acquired a 100-percent stake in Bank of Moscow Belgrade, a member of the VTB group since 2011. VTB Bank is the second largest bank in Russia and a member of the VTB group.
In her statement for the Blic daily, Jorgovanka Tabakovic, the governor of the National Bank of Serbia (NBS), says that the NBS plans to sell its shares in Komercijalna Banka, and that the bank’s owners and shareholders play the main role in preparing the bank for privatization. The privatization of Komercijalna Banka is in progress.
As stipulated by the relevant regulations, the Ministry of Finance submits the draft tender documentation to the NBS so that the Central Bank can give its opinion on the part relating to evidence of the financial condition and good business reputation of the potential buyer of a bank. According to the latest data, the Serbian government has a 41.74 percent stake in Komercijalna Banka has while 24.43 percent belongs to the European Bank for Reconstruction and Development and the IFC Fund has 10.15 percent.
Telenor Group signed a contract stipulating the sale of 100 percent of Telenor Bank to PPF Group. Acquiring the majority ownership in Telenor Bank by the PPF Group is conditioned by the corporate and regulatory approval from the National Bank of Serbia, which is the most important step in the sales process, as well as acquiring the approval from the Commission for the Protection of Competition of the Republic of Serbia and the Agency for the Protection of Competition of the Republic of Montenegro.
PPF is the largest investment group in Central and Eastern Europe that invests in various sectors, such as banking and consumer financial services, telecommunications, mining, real estate and biotechnology. PPF Group operates in 22 countries on three continents and has assets worth more than 38 billion euro.
Rumours about the merger between UniCredit and Societe General
A month ago, the Financial Times reported that Italy’s UniCredit is plotting to merge with French rival Société Générale in a bold move that would see two of Europe’s big banks join forces, leading the way for an expected round of banking mergers on the continent. Jean-Pierre Mustier, the French chief executive of UniCredit, has been pioneering the idea for several months, according to people close to the situation. They said no formal approach has been made but SocGen directors have also been studying the possibility of a combination.
Senior figures on both sides stressed discussions were at an early stage and Italy’s volatile political situation had pushed back the timetable for a deal from the original plan of 18 months. For SocGen, one of the main benefits would be gaining a leading position in Italy and Germany, both in retail and corporate banking. Neither group would be ready to proceed with a deal for at least a year, bankers said. Mr Mustier’s repair work on UniCredit, which has been hit hard by billions of euros of non-performing loans, is expected to last at least until mid-2019.
This post is also available in: Italiano