The Serbian deposit insurance agency has invited investors to submit letters of interest in the acquisition of at least 76.74% in lender Cacanska Banka. The offered stake is made of the holdings of the Serbian government, the EBRD, the IFC and local Beogradska Banka, which has been in liquidation, the agency said in a public notice. It added it has picked up Ernst&Young as an advisor on the transaction.

Potential buyers should submit their letters of interest by December 24. At the same time, they are obliged to apply with the central bank for a preliminary permit to acquire a direct ownership in Cacanska Banka. They should as well send the central bank all documentation needed for evaluating their credit worthiness.

According to the central registry of securities, the Serb government is the largest single shareholder in Cacanska Banka with a 28.5% stake, followed by the EBRD with 25% and the IFC with 20%. Beogradska Banka controls a small stake of 3.27%.

In September, the head of Cacanska Banka's executive board - Dragan Jovanovic, announced the privatisation plans, indicating there already are interested buyers. Back then Jovanovic said he believes the lender would be sold by the end of 2014 and the privatisation will be successful because of the attractive strategic position and good operations of the bank.

Cacanska Banka's pre-tax profit tumbled 65% y/y to RSD 19mn (EUR 166,600) in Jan-Sep 2013 as its net interest income fell 4% y/y to RSD 808mn. However, the bank's financial reports indicate that the large profit in Jan-Sep 2012 was mainly due to RSD 1.57bn net revenue from a change in the value of assets and liabilities - while in the nine months of 2013 this segment showed net revenue of only RSD 68mn. (Still, the latter compensated for the large net loss of RSD 1.46bn from exchange rate differences back in Jan-Sep 2012 vs. RSD 149mn net loss on this basis in the like period of the current year.)

It was the twentieth largest bank among 31 active in Serbia at end-Sep in terms of asset. Its net assets stood at RSD 33.7bn at end-Sep, up from RSD 32.8bn at end-2012. Cacanska Banka's pre-tax profit nearly halved to RSD 57mn in 2012 from RSD 130mn in 2011.