Minister of Finance of the Government of the Republic of Serbia Sinisa Mali, President of the Executive Board of Nova Ljubljanska Banka Blaz Brodnjak and member of the Executive Board of that bank Archibald Kremser signed an agreement on the sale and purchase of 83.23 percent of shares of Commercial Bank a.d Belgrade.
By signing this contract on the premises of the Ministry of Finance, Commercial Bank acquires a new strategic partner, who will take over the management of the bank after the transaction is completed.
A statement from the Ministry of Finance states that the total amount of the Republic of Serbia’s revenue by the date of the transaction will be more than 450 million euros.
Serbia’s shares in Commercial Bank were sold for 387.02 million euros, and additionally, the state will receive interest at the rate of two percent annually that NLB will be obliged to pay to the state of Serbia, for the period from January 1, 2020 to the date completion of the transaction.
The agreement also stipulates that 50 percent of the reported profit for 2019 will be paid as a dividend, on the basis of which the Republic of Serbia will receive an amount of about 31 million euros.
In addition, the payment of dividends from previous years is foreseen, on the basis of which the Republic of Serbia will receive an amount of approximately 26 million euros.
Finance Minister Sinisa Mali said he was very pleased with the successful completion of the process and the price offered.
“We are pleased with the price offered, which is among the most favorable in comparison to comparable, recent and relevant transactions in the region. This financial offer exceeds our expectations based on the valuation of the bank, made by our financial adviser Lazard”, said Mali.
He emphasized that the state will invest the total realized revenues from this transaction in a smart way, first of all in the investment plan “Serbia 2025”, as well as in repayment of expensive loans from the past.
“This will further contribute to improving the quality of life of our citizens and greater economic growth. So, Serbia has become an attractive investment destination and we expect even higher rates of growth, as well as further increases in salaries and pensions”, Mali said.
On the other hand, Commercial Bank has done a great job, but it can do much better, and I believe it will be possible thanks to a new strategic partner, the minister added.
When it comes to financial services, where you have an open market, Mali believes that a private individual can be a much better owner than the state.
NLB Executive Board Chairman Blaz Brodnjak stressed that the bank will remain committed to strengthening and further developing Commercial Bank.
He estimated that this transaction represents another very important milestone in the development of the NLB Group after the successful completion of the NLB privatization process in 2019. Strengthening our presence in Serbia, our largest and most attractive foreign market, is our strategic priority.
As a result of the transaction, the market share of NLB’s total assets in Serbia will increase to over 12 percent, making NLB the third largest banking group in the country and fulfilling its strategic goal of becoming one of the leading banks in all markets in which it operates, Brodnjak said.
Brodnjak stressed that NLB’s business volume in Serbia will be by far the largest within the group outside Slovenia, which will significantly affect the bank’s position as a regional, systemically important financial institution.
We are impressed with the quality and potential of Commercial Bank and its brand, and we commend Serbia’s commitment and thank for its transparent and professional process, Brodnjak added.
Brodnjak said that NLB would be fully committed to the further development of Commercial Bank, using the experience gained from its long-standing presence in the region, an approach focused on customer needs and customer experience and the great potential that the bank has in the market in Serbia.
For this and many other reasons, it is our great pleasure to welcome all shareholders of Commercial Bank, and especially our clients and employees, to the NLB family, said Brodnjak.
According to him, it is a serious bank, which has a clear strategy and vision, and which is the only regional financial institution listed on the London Stock Exchange.
So, we are very pleased with the process, which was completely transparent and was brought to a close with great success. We hope that the transaction will be successfully closed in the next few months, said Minister Mali, RTS reports.
