Laiki takeover of Centrobanka by Jan ‘06

Laiki Bank expects to wrap up the procedures leasing to the complete takeover of the Serb based Centrobanka a.d. by the end of 2006, with Laiki General Manager Michalis Louis stating that the total acquisition cost will range between EUR 38 to EUR 45 mln.

In the first stage, Laiki has reached a provisional agreement for the acquisition of 59% of the share capital of Centrobanka.

“We expect the Centrobanka audit to be completed by end of November, after which we shall submit the full takeover bid to the remaining shareholders,” said Louis, adding that according to Serbian laws, the takeover bid, when made will remain open for 21 days. The whole process is expected to be completed by the end of January 2006.

Louis explains again that the acquisition of the whole capital of Centrobanka will cost EUR 38-45 mln. After the takeover procedure is completed, Laiki will then sell up to 25% of Centrobanka (will depend on how much it has acquired following the takeover tender) to EBRD at an unspecified cost.

Only after the takeover process and the sale to EBRD is completed, then the Board of the Bank will decide on how it will increase the share capital of Centrobanka, depending on its expansion plans and profitability targets, said Louis.

Centrobanka was established in 1980, has 5 major branches, 3 business units and 22 sub-branches (small branches). The bank has a market share of 1.6% deposits and 1.4% in advances.

According to Louis, the future prospects of Centrobanka are excellent, considering the 10.8 mln population of Serbia, its relatively low but growing per capital GDP of USD 2907, its under-banked market with only 41 banks operating and loans to GDP of 22.5% compared to 178% in Cyprus (including Coops).