“We expect that Komercijalna Banka will make a profit of 100 million euros as early as 2024,” said the management of the NLB Group at the presentation of unaudited financial reports for 2020 of this group, noting that this acquisition is one of the biggest events in NLB history.
With the purchase of Komercijalna Banka, the NLB Group increased its market share from 1.9 to over 12 percent, and the number of active clients from 141,866 to almost one million (991,354). According to Blaz Brodnjak, General Manager of the NLB Group, with the growth of revenues and reduction of expenditures, Komercijalna Banka can get a profit of 100 million euros.
“With Komercijalna Banka, we have over 12 percent of the market in Serbia and we have become the only group that is in the top three banks in all six markets where we operate. After two months in Komercijalna, there are no surprises in terms of capital or income. It was a good investment for our shareholders, as we expect it to contribute to the growth of the group’s income by 30 percent,” said Brodnjak, adding that they announced their intention to buy the remaining 17 percent of shares held by minority shareholders and take over 100 percent of Komercijalna Banka.
According to the report, the costs of integration of the two banks will amount to around 31 million euros, but the annual benefits from the synergy of over 20 million euros are expected from next year.
At the group level, the bank will pay dividends of around 90 million euros, and the goal is to pay a total of 300 million euros to shareholders in the period from 2021 to 2023.
Komercijalna banka also brought a negative goodwill of 137 million euros to the NLB group, and they are counting on credit losses from bad loans of Komercijalna Banka in the amount of 13.4 million euros. In total, until recently, the largest Serbian state bank, brought about 40 million euros in problem loans. In addition, Komercijalna Banka contributed 3.4 billion euros in deposits, 836 million euros in cash, 1.87 billion euros in loans and 1.3 billion euros in financial assets. It is no wonder that the management of the NLB Group calls Komercijalna Banka the “sleeping beauty” that they intend to awaken.
They also plan to complete the integration of the two banks by April 2022.
According to Archibald Kremser, a member of the executive board of the NLB Group, NLB Komercijalna Banka will be managed by Vlastimir Vukovic. Kremser also estimated that one of the ways to reduce costs will be to reduce the number of employees.
“Banks of similar size have about 2,000 employees,” Kremser estimated. Komercijalna banka has about 2,700 employees according to the latest data from the website of the National Bank of Serbia.
In the end, Brodnjak added that he would monitor the possible entry into the Albanian market, although their priority is the integration of Komercijalna Banka, and they also have plans to enter Croatia, although this requires resolving disputes between the two countries, Danas reports.
