Austrian Erste Bank buys 83.3 percent of Novosadska Banka

Serbian Minister of Finance Mladjan Dinkic said today that Austrian Erste Bank, which signed a €73 million contract today to acquire 83.3 percent of Novosadska Banka, had offered the highest price and the best social welfare and investment programmes in the tender for Novosadska.

Dinkic said that the offered price was 3.3 percent higher than the value of Novosadska’s capital and he added that this contract is one of the best bank privatisation deals in Serbia as well as in Central and Eastern Europe.

According to him, the arrival of Austria’s largest private bank, which holds a 25 percent market share there, is a result of an excellent transaction that the state had made with its stake in Novosadska.

Dinkic said that the new owner of Novosadska has agreed to buy out the remaining 16.7 percent of the bank’s equity from small shareholders within 90 days’ time and at the same per share price that it is paying for the state’s stake.

He expressed the hope, however, that this process will be finished in the next two or three weeks.

Dinkic added that in the deal with Erste Bank, they are obligated to approve €15 million in five-year loans to small and medium sized enterprises with interest rates two percentage points lower than the current interest rate on SME development loans.

According to him, Erste Bank has also committed itself to disbursing €2 million in various donations over the next five years and to investing a further €10 million in short-term loans to Novosadska’s major corporate clients.

Dinkic also recalled that the state paid a total of €183 million for debt-for-equity swaps in three banks including Novosadska and that it later earned €275 million from their privatisations, thus posting a total gain of nearly €90 million.

Erste Board Chairman Andreas Treichl said following the signing ceremony that this is “one of the most professional” deals the Austrian bank has ever concluded in Central and Eastern Europe and he added that Erste has ambitious plans in the Serbian market in both retail and corporate lending.