Serbia will shut Razvojna Banka Vojvodine AD (MTBN) after transferring its assets and liabilities to Postanska Stedionica Banka AD (PSBN) as the state-controlled bank’s losses grew almost 83 percent in three months.
Postanska will take over 17.5 billion dinars ($203.79 million) of deposits and 6.3 billion dinars will be covered with government bonds, the government said in an e-mailed statement today. The decision ends the search for a strategic partner to take over the assets and liabilities of the unprofitable bank, 62 percent owned by Serbia’s northern province of Vojvodina.
The government decided that “Razvojna Banka Vojvodine and Postanska Stedionica Banka will sign an agreement on the transfer of part of assets and liabilities” and all Razvojna’s depositors will become Postanska clients as of April 8, it said.
Razvojna had a 14.53 billion-dinar accumulated loss in 2012, which expanded from 7.94 billion dinars at the end of September, according to data posted on the Belgrade Stock Exchange website on March 28. Its assets contracted to 25.95 billion dinars in 2012 from 35.5 billion dinars in 2011, the data showed.
The transfer to Postanska Stedionica Banka is in line with an Oct. 26 law designed to merge state banks, averting their bankruptcy and maintaining financial stability.
Razvojna Banka is the second bank in a year in which the government is trying to save deposits and avoid a run on banks as the Balkan country fights the effect of the European debt crisis.
Serbia wants to save almost 110 million euros ($142 million) in insured deposits and almost as much in uninsured deposits at Razvojna, as well as 70,000 depositors, it said.
The effort to save the bank, previously known as Metals Banka AD, was the second in two years. In late April 2010, Vojvodina added capital to bail it out and renamed it Razvojna Banka Vojvodine. Its market share by assets stood at 1.3 percent in September.
Serbia and Vojvodina will jointly sell a five-year bond to match the size of uninsured deposits.
The government set aside 300 million euros in its 2013 budget as a reserve financial stability fund to bolster the banking industry if needed. Prime Minister Ivica Dacic’s Cabinet, in office since July, is also seeking an adviser to help it recapitalize or sell Privredna Banka (PRBN) Beograd AD, according to a Dec. 5 invitation published in the Belgrade newspaper Politika.
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