Collapse of Agrobanka and RBV costs Serbia EUR 600 million

The expenses resulting from the collapse of Nova Agrobanka and Razvojna Banka Vojvodina (Vojvodina Development Bank - RBV) total EUR 600 million, Branko Popovic, adviser to the finance minister, told the national broadcasting company RTS.

He noted that two principles had been defined based on the examples of Agrobanka and RBV - the principles of sustainable solution and minimum costs for taxpayers, adding that they would be used to resolve similar situations in the future.

As Popovic reminded, Agrobanka was not in the possession of the State at the moment of its collapse, but it became a state-owned bank due to government's neglect.

- They became state-owned banks because the government failed to treat them adequately, thus creating agony that led to huge expenses - Popovic pointed out.

He added that the solutions for Agrobanka and RBV were not a matter of political decision, but a result of "banking mathematics and analysis."

Popovic noted that the number of business banks in Serbia was too big for the strength of its economy, announcing that that number would be significantly reduced by the year's end or in 2014.

Popovic also announced at least one capital increase at Postal Savings Bank, which has successfully integrated Nova Agrobanka and RBV.