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Balkan bank privatizations: the never-ending story

You wait years for a Balkan bank privatization and then three come along at once.


On October 15, Slovenia launched an IPO of local market leader NLB, just four days after inviting expressions of interest for number three player Abanka. The same day, Serbia’s finance ministry advertised for an adviser to sell its stake in Komercijalna Banka, the country’s second-largest lender.

Exciting times for investors looking to tap into the growth markets of south-eastern Europe? Well, maybe.

Whether all or any of these sales will go through is an open question. Policymakers in both Slovenia and Serbia have long track records of failing to deliver on privatization promises, particularly when it comes to the banking sector. 

The listing of NLB, for example, comes just 16 months after a previous attempt was cancelled when the Slovenian government refused to approve the price range.

The bank itself is in better shape this time. Return on equity is coming in at around 13%, partly thanks to a strong performance by subsidiaries in smaller Balkan markets, and asset quality is no longer a concern.

It’s the only opportunity for equity investors to get direct exposure to the banking sectors of former Yugoslavia.

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