Serbia’s Postanska Stedionica Bank to Take Over Agrobanka
Serbia’s Postanska Stedionica Banka AD (PSBN) is the “most stable” Serbian bank and it will take over the assets of Nova Agrobanka.
The Cabinet will submit to parliament a draft law on the transfer of so-called problematic bank assets to the state, the government in the capital Belgrade said in an e-mailed statement today. The law was prepared in close cooperation with the International Monetary Fund, it said.
“The decision is designed to preserve financial stability,” Finance Minister Mladjan Dinkic told reporters today adding that the transaction will expand Postanska’s assets to “more than one billion euros.”
The government decided to shut down Nova Agrobanka, set up in May as a “bridge bank” after the collapse of Agrobanka AD, leaving the government time to work out a permanent solution.
Authorities fired Agrobanka’s management on Dec. 29 and placed it in receivership after inspectors discovered its capital didn’t match the risk it had assumed. Agrobanka, in which the government held a 20 percent stake, had an unaudited 2011 loss of 29.7 billion dinars ($311.4 million) following a full-year pretax profit of 1.18 billion dinars in 2010 and a loss of 2.27 billion dinars at the end of September 2011. The central bank revoked Agrobanka’s license on May 26.
Illiquid and Insolvent
Saving Nova Agrobanka, which is both “illiquid and insolvent,” would have cost Serbia “at least 230 million euros ($300.2 million) and that’s irrational,” Dinkic said. Nova Agrobanka held a total of 400 million euros in insured and non- insured savings and other deposits. It has been making a loss of “two million euros per month” after the previous government also transferred some “problematic credits,” he added.
Agrobanka’s minority shareholders will have “all the rights according to Serbia’s bankruptcy law,” Dinkic said. Minority shareholders, who announced plans for a legal action against Serbia, said on Oct. 19 they would “continue with legal activities to regain expropriated property” the value of which they put at 70 million euros.
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