August 3 (SeeNews) - Greece's Alpha Bank on Wednesday denied reports that it is likely to sell its Serbian unit to Serbian lender AIK Banka [BEL:AIKB].
"In relation to certain press reports regarding a potential sale of its Serbian operations, Alpha Bank states that they are unfounded and it is not engaged in definitive discussions with any party at present," the lender said in a statement. "The Bank notes that, consistent with its business plan, it continuously explores value enhancing options for all its investments."
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Earlier on Wednesday, a document obtained by SeeNews showed that AIK Banka plans to ask its shareholders to approve an acquisition of up to 100% of Alpha Bank Srbija at a general shareholders meeting scheduled for September 2.
AIK Banka first published on Tuesday an invitation for the shareholders meeting, which included only a brief description of the items on the agenda, including: "7. Decision on acquisition of subsidiary company of the Bank" as the last point on the agenda. The detailed materials for the meeting, seen by SeeNews, were not released officially, but were made available to shareholders only.
However, on Wednesday afternoon, AIK Banka published a revised invitation document, removing point 7. of the agenda, regarding the potential acquisition, and leaving it with the previous six items, as originally published.
Both invitation documents, dated August 2 and August 3, can be seen on the website of the Belgrade Stock Exchange.
In the originally circulated detailed materials for the meeting, AIK Banka explained, as a rationale for the potential acquisition, that its capital adequacy stood at 34.49% as at end-June, which is by 2.89% more than at end-March, while its strategic objectives for further growth envisage strengthening of its market position in the domestic market and in the region through acquisitions of banks that have stable market presence.
"Given the expected growth of the Serbian economy and banking sector, with a bigger market share AIK Banka would feel more benefits from the economic growth," the document read.
AIK Banka, a subsidiary of Serbian vertically-integrated agro-industrial conglomerate MK Group, was the sixth biggest lender in Serbia with total assets of 178.3 billion dinars ($1.6 billion/1.4 billion euro) and a market share of 5.9% as at end-March, according to the latest available central bank data. At the same time, Alpha Bank Srbija had total assets of 76.8 billion dinars and a market share of 2.5%, ranking as the 14th biggest lender among a total of 30.
Other benefits from a potential merger include lowered costs on the back of migration of services and optimisation of office space, as well as through economies of scale effects, in addition to opportunities for expanding the existing product and service portfolios of both banks, the document explained.
Alpha Bank, which presently has 67 branches across the country, entered the Serbian market in 2002. In 2005, it acquired Jubanka, Serbia’s seventh largest bank, in a 152 million euro privatisation deal.
However, the Greek parent has been recently selling its subsidiaries in southeast Europe, in line with its EU-backed restructuring plan, which was approved by the European Commission in June 2014 and amended in November 2015. Under the plan, the lender has committed to focus its operations only on its core markets.
In July 2015, Alpha Bank agreed to sell its Bulgarian unit to Postbank, the Bulgarian subsidiary of Greece’s Eurobank EFG. The deal was completed earlier this year.
In May 2016, it sold 100% of its Macedonian unit to Silk Road Capital, a frontier market-focused investment banking advisory, owned by a Swiss private investor.
In June 2016, Alpha Bank Romania sold its 12.5% stake in Moldova’s third-largest lender Victoriabank to the European Bank for Reconstruction and Development (EBRD) for 6 million euro ($6.7 million).
AIK Banka likely to buy 100% of Gorenjska Banka
The original document also noted that AIK Banka had received the necessary approval from the National Bank of Serbia (NBS) and is currently in the process of obtaining the consent of Slovenia's central bank for the acquisition of up to 100% of Slovenian lender Gorenjska Banka.
In January, AIK Banka became the second largest shareholder in Gorenjska Banka with a 13.9% stake by investing almost 13 million euro in a share capital increase, needed by the small Slovenian lender to meet central bank requirements.
In June, Serbian media reported that the European Central Bank (ECB) had allowed AIK Banka to take over Gorenjska Banka. The information was not confirmed either by the ECB or AIK Banka, but media speculated that AIK Banka may become the owner of an about 50% stake in the Kranj-based Slovenian bank.
In February, MK Group's owner, Miodrag Kostic, said he is interested in boosting the Gorenjska Banka stake.
In September, Slovenia's central bank ordered indebted local conglomerate Sava [LJE:SAVA], which presently owns 37.6% of Gorenjska Banka, to dispose of its stake because it does not have the financial strength to give the bank the support it needs.
Gorenjska Banka was the last of eight lenders that failed Slovenia's stress tests in December 2013 to increase its capital.
(1 euro=123.114 dinars)
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