October 15, 2018 / 11:10 AM / a month ago

Serbia takes first step to sell government stake in second-largest lender

BELGRADE, Oct 15 (Reuters) - Serbia invited applications on Monday for a financial adviser to sell the government’s stake in Komercijalna Banka, the Balkan country’s second largest lender, as it continues with a wide-reaching privatisation programme.

As part of its arrangements with the International Monetary Fund, which are currently based on a non-financial and advisory role, Serbia needs to sell its stakes in state-operated firms, including Komercijalna Banka.

The state is the single largest shareholder in the bank, holding 41.7 percent. The European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC), part of the World Bank group, hold 24.4 and 10.1 percent respectively.

A statement posted on the finance ministry’s website said the government would offer its whole stake for sale, while other shareholders may also offer to sell their holdings as part of the privatisation process.

Other notable shareholders include Germany’s Deutsche Investitions-und- Entwicklungsgesellschaft (DEG) with a 4.6 percent holding and Swedfund International Aktiebo with 2.3 percent. The rest is held by small shareholders.

By total assets, Komercijalna Banka has a 10.83 percent share of Serbia’s banking sector, behind Banca Intesa, which is part of Italy’s Intesa Sanpaolo. By total deposits, its share is 12.18 percent. The majority of banks in Serbia are local subsidiaries of foreign lenders.

At the end of June, Komercijalna Banka, which operates 204 branches with a workforce of 2,809, had 3.53 billion euros in assets and 2.86 billion euros in deposits. Its profit stood at 32 million euros, the statement said.

Eligible firms must have strong experience in the privatisation of banks and can also form a consortium, the statement added. They have until Nov. 12 to express their interest.

In February, Serbian Prime Minister Ana Brnabic said the government had been approached by a number of banks and investment funds interested in Komercijalna, while in December 2017, the Group Chief Executive of Hungary’s OTP Bank said his bank was looking into the purchase of a stake in the lender.

The ministry’s press office told Reuters that the appointment of a financial advisor is only in relation to the sale of the government’s stake.

The government had previously, in 2015, appointed Nomura as an advisor to sell an approximately 83 percent stake in the bank consisting of its own shares and those of the EBRD, the IFC, DEG and Swedfund. (Reporting by Aleksandar Vasovic; Editing by Kirsten Donovan)

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