BELGRADE (Reuters) – Serbia yesterday sold Vojvodjanska Banka to Greece’s National Bank for 385 million euros ($489.9 million), completing the sector’s privatization with the biggest bank sale to date. Finance Minister Mladjan Dinkic said the government would receive 360 million euros now, while 25 million euros – matching Vojvodjanska’s bad loan portfolio – would be kept in an escrow account until mid-2008 and released gradually as the bank collects the debt. «NBG also agreed to invest 40 million euros over the next three years to upgrade Vojvodjanska,» Dinkic told a news conference after the signing ceremony. Vojvodjanska will keep its name and, for the next three years, all of its 2,415 staff, he added. Vojvodjanska, Serbia’s seventh-largest lender by assets with a 5 percent market share, had assets of 498 million euros and capital of 91.4 million euros at the end of March. NBG, the only company in June to submit a binding bid for Vojvodjanska, has operated in Serbia since 2002 and developed into a medium-sized bank with a network in 17 bigger towns. The deal will make NBG the sixth-biggest lender by assets in a market posting double-digit growth rates for three years in a row. The assets of Serbia’s 38 banks topped $15 billion in the first half of 2006 from $10.8 billion at the end of 2005, mainly driven up by expanding credit activity. NBG shares closed 0.24 percent higher at 32.88 euros on the Athens bourse yesterday. NBG President Takis Arapoglou said the deal was part of NBG’s strategy to become a leader in Southeast Europe. «For us, Serbia is a strategic market with very high growth potential in the banking sector. The new group (in Serbia) will have an 8 percent market share in deposits and a 6 percent share in loans,» Arapoglou told reporters in Belgrade. Dinkic said the government had no more banks left for sale. Vojvodjanska narrowly escaped closure four years ago and became almost fully state-owned in 2002, when the government nationalized 16 banks, taking over their debts to the Paris and London Clubs of creditors and swapping the debt for equity. «The reform of the banking sector has been a success. Confidence in banks has been restored, private savings now stand at around 3 billion euros, compared to 10 or 20 million in 2001, and the work force has grown by 10,000,» Dinkic said. Serbia began reforming the sector in January 2002 by closing four major debt-laden banks. The move ended the communist-era banking, which involved heavy political control of the sector. Also yesterday, Piraeus Bank, Greece’s fourth-largest lender, announced it had bought Romanian broker European Securities SA, a member of the Bucharest Stock Exchange, for an undisclosed sum. «The buyout of European Securities is the first investment by the group in the securities sector outside Greece, part of its strategy to broaden activities in capital markets and investment banking in Eastern European and southeast Mediterranean countries,» the bank said. The bank said it bought 78.25 percent of European Securities with another 19.56 percent acquired by its subsidiary Piraeus Securities. Piraeus Bank is present in Bulgaria, Romania, Egypt, Albania and Serbia.