Government to consider recapitalization of Komercijalna Banka on October 18th

The Serbian government should make a decision on Thursday (October 18th) to acquire 3.3 million shares in Komercijalna Banka. This transaction will be formally completed on October 30th, and RSD 11.57 billion (somewhat over EUR 100 million) have already been earmarked in the budget for that purpose, NIN magazine reports.

- If the state failed to exercise the right to recapitalization, its formal stake would be reduced from 42.6 to 27.46 percent by the year's end, while the majority owners of Komercijalna Banka would be the European Bank for Reconstruction and Development (EBRD), International Finance Corporation from Washington (IFC), Germany's DEG and Sweden's Swedfund. These four institutions would hold a controlling stake of 51.54 percent in that bank on 1 January 2013. To be completely clear: that would inflict the most damage to the state - Chairman of the Executive Board of Komercijalna Banka Ivica Smolic told NIN.

When told that there were experts believing that the state should sell its stake in domestic banks, Smolic voiced his belief that if the state ever decided to sell Komercijalna Banka, it would manage to earn more money from the sale of Komercijalna Banka shares than it had invested in their acquisition.

He denied that Deutsche Bank had ever really had an intention to take over Komercijalna Banka, pointing out that the decision on the privatization would be made by shareholders, primarily the Serbian government, the EBRD and the IFC.