Announcing the deal signed today between the NLB management and the Serbian government, the bank said the conclusion of the transaction was pending approvals from several institutions, including the European Central Bank and the countries' central banks.

According to the NLB, the purchase price for the 83.23% stake in Komercijalna Banka is EUR 387 million, which will be payable in cash on completion.

The Slovenian market leader added that, in accordance with the Serbian bank privatisation regulations, it was not required to launch a mandatory tender offer for the rest of the shares in the Serbian bank.

The purchase price implies a valuation of EUR 465 million for 100% of Komercijalna Banka's ordinary share capital.

It will be subject to a 2% annual interest rate between 1 January 2020 and closing, with NLB benefiting from the bank's earnings during that period.

Subject to approval of the Serbian central bank, the existing shareholders of Komercijalna Banka will receive a dividend equating to 50% of 2019 net profit up to a maximum of EUR 38 million before closing.

As a result of the transaction, NLB's market share in Serbia will increase to over 12.1% by total assets, making it the third largest banking group in the country, the Slovenian bank added.

"NLB's operations in Serbia will be by far the largest outside of Slovenia," commented Blaž Brodnjak, the CEO of the bank which already operates the NLB Banka Beograd subsidiary.

The Serbian subsidiary, which has 28 offices and which had total assets of EUR 614 million and posted EUR 4.1 million in net profit last year, posted a 29% growth in net loans to customers in 2019, the biggest in the group.

According to the Serbian media, Komercijalna Banka has EUR 3.5 billion in total assets, and last year posted EUR 74 million in profit. The bank has 2,744 employees and 200 offices in Serbia, Montenegro and Bosnia-Herzegovina.