Komercijalna Banka joins state-subsidised housing programme

Serbian Minister of Finance Mladjan Dinkic, Director of the National Service for Housing Loan Insurance Aleksandar Jovic and representatives of Komercijalna Banka signed a contract today on housing loans for married couples up to 45 years of age.

At a press conference following the signing of the contract, Dinkic announced that as of February 1, housing loans will be approved to couples under 45 years of age with net monthly salaries up to 100,000 dinars.

He explained the decision to limit subsidies to couples with net monthly salaries up to 100,000 dinars by saying this will ensure loans are granted to those who are in real need of such assistance, which in Serbia is the middle class.

He announced that as of February 27, when the Law on Mortgage comes into force, couples will also be allowed to mortgage flats and houses purchased through state-subsidised loans.

Dinkic recalled that Komercijalna Banka is the eighth bank in Serbia to sign a contract with the Ministry of Finance. In the past three months, around €21 million from the government programme was set aside for financing housing construction, out of which €15.5 million was provided by banks and €5.5 by the state, he added.

„The average amount of approved state-subsidised loans last year was around €28,000, and the National Service for Housing Loan Insurance provided loans totalling approximately €42 million“, explained Dinkic, adding that the planned figure for 2006 is €100 million.

The Director of Komercijalna Banka Ivica Smolic announced that as of February 1, Komercijalna Banka will approve three types of housing loans: loans from its own funds, indexed in euros or Swiss francs, loans insured by the National Service also indexed in euros or Swiss francs, and loans subsidised by the state.

According to Smolic, neither of these options requires endorsers or down payments, and the most favourable loans are ones subsidised by the state whose maximum amount is not limited. The repayment period of these loans is 25 years, the nominal interest rate is 4.45% annually (for euro-indexed loans) and the effective 5.37%.

Dinkic said that by late March the European Bank for Reconstruction and Development (EBRD) should recapitalise 25% of Komercijalna Banka capital.

He said talks with EBRD are in the final stage, adding that Serbia is also negotiating an EBRD €30 million loan under favourable conditions for the purpose of financing housing construction in the country.

He recalled that last year Komercijalna Banka made a considerable profit and that it is ranked first when it comes to the amount of citizens’ foreign currency savings, which has almost totalled €450 million.

According to Dinkic’s evaluation, the market value of Komercijalna Banka is around €400 million. It is 67% state-owned, that is about 48% is directly owned by the state and 20% indirectly through socially-owned companies.

Dinkic announced that Postal Savings Bank and Srpska Bank, former YU Garant Bank, will soon merge.