Trading in Agrobanka shares halted - Decision on old bank by end-June 2012

The National Bank of Serbia (NBS) and the state as a majority owner waited until Agrobanka made a loss of about EUR 290 million to react and announce to the public that the Bank cannot be saved. Luckily, citizens' saving and other deposits have remained intact and been transferred to a new bank. Old Agrobanka is left with a burden of uncollectible loans. And, in less than a month, when all granted loans and other investments are thoroughly checked, we will know if the Bank is going into bankruptcy, liquidation or some third solution will be found, Novosti wrote Monday.

The management of Nova Agrobanka (New Agrobanka) has already split the property. Certain number of offices will be kept by old Agrobanka, while the rest will be transferred to the new bank.

The state had to set aside EUR 90 million from an almost empty budget to form a new bank. It did that by selling T-bills worth nearly EUR 85 million.

One of the members of the Managing Board of old Agrobanka told Novosti that that bank had also been burdened by some claims from the past. In the 1980s, Agrobanka served as a technical service for international loans used by Beogradska Banka. When Beobanka went bankrupt, its obligations were transferred to Agrobanka. Also, many loans granted to enterprises, one of which is a loan approved to Srbijanka Valjevo, cannot be collected. Because of such loans, which are considered risky, the NBS requested 100% reserve, which increases the overall debt of Agrobanka.

Trading in Agrobanka shares halted

After the National Bank of Serbia (NBS) revoked the license of Agrobanka on Friday, the Belgrade Stock Exchange announced Monday morning that it had temporarily halted the trading in common and preferred shares in Agrobanka.