Serbia Adopts Law Enabling Postanska Bank to Take Over Agrobanka
Lawmakers approved the bill today, which Finance Minister Mladjan Dinkic, speaking today in parliament, said may have only one application, to transfer what’s left of the troubled bank to state-controlled Postanska Stedionica. The government said it consulted the International Monetary Fund in drafting the bill.
The transaction will expand Postanska’s assets to more than 1 billion euros ($1.29 billion) and add some 250,000 clients of Nova Agrobanka, along with the transfer of assets. The bridge bank was formed in May as a temporary solution after the authorities put Agrobanka in receivership because a regulator had found its capital didn’t match the risk it had assumed.
The government held a 20 percent stake in Agrobanka, and smaller, private shareholders have warned they would take legal action against Serbia to protect their investment, seen at 70 million euros.
The minority shareholders “have nothing to lose with this law, because they lost already” when owners failed to replace Agrobanka managers who let the rate of non-performing loans reach 80 percent, Dinkic said.
He proposed a similar solution for the troubled Razvojna Banka Vojvodine AD (MTBN) where non-performing loans stand at 75 percent.
The authorities of the northern Vojvodina province, which control the Novi Sad-based Razvojna Banka, decided to inject capital in the bank to try to save it. Vojvodina’s own parliament voted late yesterday in favor of organizing the province’s first bond issue to raise 15 billion dinars ($170 million) needed for the capital increase. Dinkic said they were making a “grave mistake.”
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