Telenor and Societe General possible buyers of Serbia's KBC Banka - report.

By bne IntelliNews March 21, 2013
Norwegian telecommunications firm Telenor and France's Societe General are seen as possible buyers of the Serbian unit of Belgium's KBC Group, which has been on sale for several years now, a report of daily Politika indicated. KBC has been posting loss in almost every year since it entered Serbia in 2007 and could soon become the first foreign lender to exit the country. In February, the head of Telenor Serbia, Ove Fredheim, said the company plans to set up or buy a commercial bank in Serbia and was considering three options - receiving a licence to establish a new bank, buying an existing lender or providing banking services via a partnership. According to Politika, Societe General, which already has a subsidiary in Serbia but is considering expansion, is another possible buyer of KBC Banka. Furthermore, Telenor and Societe General could take over different segments and thus split the bank's existing activities. Politika says, quoting anonymous sources, that talks among the parties are already underway and the central bank has been informed about the process. Telenor, whose core business is telephony services, has no experience in banking (apart from owning a bank in Pakistan), and is therefore considered to have no intention to get involved into classical banking but most likely aims to develop electronic and Internet retail banking. Hence, the telecommunications firm might be interested to acquire only KBC Banka's operational licence, the report says. Societe Generale, on the other hand, could be a candidate for KBC Banka's network branch, loan and deposit portfolios. However, it is not clear yet whether those two potential buyers would also receive the non-performing loans if they take over KBC Banka. It is more likely that the seller settles this bad loans problem at the expense of its own capital, or compensates for their loss via reducing the sales price. Apart from 2011 when it posted a slim pre-tax profit of RSD 128mn (EUR 1.1mn), KBC Banka posted a loss in each of the other four years of its presence in Serbia and reported a pre-tax loss of RSD 319mn for Jan-Sep 2012, latest available central bank figures show. According to unofficial information, KBC Banka has no problems with its retail loans but with the corporate credits. Also, some 40% of its loan portfolio has been in Swiss francs, which servicing was put at risk with the strengthening of this currency amid the global crisis. The head broker of local Sinteza Invest Group, Nenad Gujanicic, told Politika that KBC Banka posted a RSD 890mn loss last year although its interest revenue rose 1.4% to RSD 1.25bn. The most dramatic change in the lender's 2012 balances came from the 12.5% increase in its expenses for bad loans write-off and provisioning to RSD 1bn.

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