Komercijalna Banka a.d. Beograd pre-privatisation

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EBRD’s pre-privatisation equity investment in Komercijalna Banka (KB) will be the first step for full privatisation through an IPO in 3 to 5 years. EBRD’s presence will be particularly important as it will actively participate in the preparation for the IPO through the design and implementation of a comprehensive institution building plan, with particular emphasis in such key areas as improved corporate governance, strengthened credit and risk management procedures, internal re-organisation and upgraded customer services. EBRD’s investment will fund necessary investments particularly in IT, branch network upgrading and staff training. The main objective will be the development of KB into a modern, efficient bank in an increasingly competitive financial sector, taking full advantage of its branch network, the largest in Serbia. Further, EBRD’s long-term debt finance will help KB to expand its operations and introduce new products, particularly to finance residential mortgages in Serbia. The proposed project is expected to contribute to the transition process of the Serbian banking sector and the overall economy of the country. The transition impact potential of the project is built around the following elements: 1. Preparation of KB for full privatisation by upgrading its key business and control functions and strengthening corporate governance. The project, through an institution building plan, will re-shape the bank’s business and operations in preparation for full privatisation. 2. Facilitation of the transfer of ownership to the private sector through EBRD involvement and conditionality. KB is currently Serbia’s third largest bank by assets with a market share of 9.8%. KB is also Serbia’s largest financial institution still majority owned by the State, which directly and indirectly holds 70.0% of the bank’s capital. KB recorded total assets of EUR 874.0 million and equity of EUR 104.5 million as at December 2005. Acquisition of up to 25% of KB’s capital by subscribing to newly issued shares. In addition, EBRD will also extend to KB a facility for mortgage finance. tbc KB will carry out its operations in accordance with EBRD's Environmental Procedures for Local Banks. In implementing these procedures, KB will require its borrowers to comply, at a minimum, with national /local health, safety, environmental and public consultation requirements. EBRD’s equity investment is complemented by an institution building plan. The Canadian government has granted EUR 1.5 million in technical assistance for consultancy services for the implementation of the institution building plan. The technical assistance programme started in September 2006 and will last for two years. Komercijalna Banka Svetog Save 14, 11000 Beograd e-mail: posta@kombank.com Phone: (381) 11 30 80 100 Fax: (40)-264-407179