Nova.rs: Serbia is interested in buying Prva banka and shares held by EPCG

Serbia could soon, through one of its banks, become the owner of the First Bank of Montenegro, whose current majority owner is the brother of the former president, Milo Đukanović, reports Nova.rs.

According to information from that portal, intensive negotiations on the acquisition are underway. For months, there has been speculation that a bank with losses of millions will be bought by someone from the region or Europe, and if the negotiations go according to plan, it could be Serbia, through one of the banks in which it has a majority stake.

As Nova.rs learns, negotiations on the purchase of Prva banka, i.e. the majority of the shares, have been ongoing for several months.

Thus, on Tuesday, June 4, the executive director of Prva banka, Tarik Telaćević, was in Belgrade, where he presented the business balance sheets and other important information about the bank.

By the way, Prva banka is a joint-stock company, and 41,46 percent of the shares are owned by Aco Đukanović, the brother of the former president Milo Đukanović.

Why does Serbia want a Montenegrin bank?

The main reason for the purchase of Prva banka is the establishment of direct payment transactions between Serbia and Montenegro.

Also, Serbia is interested in the purchase of shares held by Elektroprivreda Crne Gore (EPCG) in this bank, which is a 19,75 percent ownership stake.

In addition, Prva banka has a developed infrastructure that would support the payment transactions of Serbia and Montenegro.

Also, the annual exchange of goods and services between Serbia and Montenegro is about one billion euros, and payments according to the current system are made through correspondent banks, which, of course, increases the costs of these transactions.

What are the next steps?

In the following period, it is expected to receive the consent of the regulatory authorities. After that, the actual process of realization should be entered. Then Serbia would become the owner of Prva banka.

This deal would mean the first serious entry of Serbia into the Montenegrin market, and therefore mark the beginning of a new era in mutual relations, so it is clear that this transaction is imbued with political, not only economic, motives.

The collapse of the First Bank

In the financial report that was published on the website of the Montenegrin Stock Exchange in May, the auditor stated that there is interest in the purchase of the majority package of the bank's shares by "strategic investors from Europe and the region".

The auditor determined that several items in Prva banka's statements were incorrect and needed correction, as well as that according to these parameters, the bank now has a total capital adequacy ratio of 13,39 percent (while the prescribed limit is 10,63 percent), of the total core capital 9,77 percent (prescribed limit 8,63 percent) and regular capital 9,77 percent (prescribed limit 4,5 percent).

He also stated that, according to the bank's management, "some of the offers" for its sale may be realized in the short term, which would "create the necessary conditions for the survival and further development of the bank".

At the end of last year, Prva Bank had an accumulated loss of 32 million euros.

The auditor also stated that the amount of acquired property in the statements was underestimated by 1,35 million, and that the result in 2022 was thus overestimated by 541 thousand euros.

Who is the current owner of Prva banka?

The majority owner of the joint stock company Prva banka Crne Gore is the brother of the former president Milo Đukanović, Aco.

The two of them were repeatedly linked to the Italian mafia, and at the seat of the scandal from 2021, there was the First Bank. The Đukanovićs are linked to the Albanian oil tycoon Rezart Tacić, who embezzled millions for the needs of the mafia organization Coza Nostra, and the witness in this case shared with the court his conversation with Milo Đukanović, in which he mentioned plans to invest in the First Bank of Montenegro .

Conversations recorded in June 2021 prove that Thaci was in contact with the Đukanović brothers. In one of them, an unknown person tells them that they will be paid if they open an account in "the president's bank", referring to Prva banka.

Milo Đukanović denied these allegations, and Aco did not advertise.