French insurance company Cardif and bank BNP Paribas soon in Serbia

It is more and more likely that another insurance company and two banks will come to Serbia soon. People in the Central Bank of Serbia confirmed to Novac that insurance company Cardif, owned by French BNP Paribas Group, expressed interest in founding the life insurance company in Serbia.

Formal application for license has not been submitted yet - but, as Blic learns, Cardif should arrive in Serbian market within the next few months. At nearly the same time we should expect the arrival of the biggest French bank - BNP Paribas, of which group owns Findomestic Bank in Serbia - Blic learned from the sources close to BNP Paribas.

Such "arrangements" will not be the only "dessert" in the financial market because Nova Kreditna Banka (New Credit Bank) from Maribor announced its final decision the previous week on acquisition of Kragujevac's Credy Bank, while the Government of Serbia approved the merger of Privredna Banka Pančevo and the Postal Savings Bank.

Insurance company Cardif, which operates in over 40 countries worldwide as a member of BNP Paribas Group, will be the first to arrive in Serbian market. As people from the central bank explained to Blic, Cardif has not expressed interest in acquisition of some existing insurance company, but in formation of a new company. Its partners today are about 30 world's biggest banks, numerous finance institutions and companies from different economic branches (Volkswagen, Renault, GMAC, Fiat...).

At nearly the same time, Serbian market will also get BNP Paribas Bank, the Europe's largest and the world's fifth largest banking group. This bank operates within BNP Paribas Group, which officially became the owner of Findomestic Bank in Serbia in August 2009.

As Blic learns, it is most likely that Findomestic Bank will change its name and become BNP Paribas Bank, which will later continue expansion of the network.

- Few months ago, Findomestic Bank officially became a member of BNP Paribas Group. We can expect now that that French bank starts operating in Serbia through Findomestic Bank. In that way, Serbian market will get the largest banking group, as well as greater access to cheaper funds and more favorable offer - says the source of Blic.

BNP Paribas Group came to Serbia last year when it started working with real estates through its real estate consulting company Danos from Greece. Danos & Associates is today one of the global leaders in the real estate business.

Price of Credy Bank's stocks skyrocketed upon announcement of takeover

Serbian financial market may soon be entered by Nova Kreditna Banka from Maribor (NKBM), which is majority owned by the state. After last year's announcement of the intention for takeover of Kragujevac's Credy Bank, it seems that the bank from Slovenia finally made the decision the previous week.

- In connection with our strategic decision to expand the business to southeast Europe, the administrative board ordered the management to perform all the necessary procedures to take over the majority package of stocks in Credy Bank - said the people from NKBM, the second largest bank in Slovenia, of which total market value amounts to 310m EUR.

This news, in only two days, increased the value of stocks of Credy Bank on the Belgrade Stock Exchange by over 20%, to 3,500 RSD. About 2,400 stocks are in demand, while only 400 stocks were in supply.

How much Serbia, which indirectly owns 66% of stocks in Credy Bank, may earn from its sale depend on several factors. What is for sure is that the amount will not be even close to the price from two years ago, when the banks were sold at the prices 3 to 5 times higher than their accounting values.

Slovenian media speculate that the NKBM's management set aside 10m EUR for the acquisition, but what they do not know is if that amount is reserved for procurement of the state-owned stocks only or all the stocks. The current market value of Credy Bank on the Belgrade Stock Exchange is 5.7m EUR.

- The price will be primarily affected by the general economic ambient, which is drastically different than in 2006 and 2007. The number of strategic investors in Serbia, as well as in the whole region of Southeast Europe, is now significantly smaller. The prognoses for the growth of GNP in the region and Serbia are small, which is also the case with the expected growth of domestic banking sector, while the competition in the sector is relatively strong - says Milan Kovač, CEO of Investment Funds Management Company Ilirika.

Kovač also says that Credy Bank registers losses.

- Also, Credy Bank does not have significant market share, so that much effort will have to be invested after the acquisition in , which is not an easy job for many domestic banks at this moment - says Kovač.

At the end of September 2009, Credy Bank's assets amounted to 21.2 billion RSD (about 218m EUR).

Merger of Privredna Banka Pančevo and Postal Savings Bank

The Government of Serbia has approved the merger of Privredna Banka Pančevo and Postal Savings Bank. The state owns 97% of capital of the Postal Savings Bank and 96% of Privredna Banka Pančevo. It has been speculated over the past few years that, in addition to aforementioned banks, part of this "fusion" will be Srpska Banka.

At the end of the third quarter of 2009, Privredna Banka Pančevo had the assets of only 4.6 billion RSD, while the net losses amounted to 1.8 billion RSD. Its stocks, which are present on the Belgrade Stock Exchange, are rarely subject of trading. According to this week's market price of 6,336 RSD per stock, the bank is worth 1.5 billion RSD or 15.7m EUR.

(Note: complete text is taken over from newspaper Blic of January 30th, 2010)