ECONOMY

Banks take to Belgrade

The Commercial Bank of Greece and Piraeus Bank are reported to be preparing to follow in the footsteps of National and Alpha banks, which have opened branches in Belgrade; according to sources, discussions are under way for the acquisition of two local banks, in view of the opportunities offered by the Yugoslav government’s planned extensive overhaul of the banking system. The sources say that Commercial Bank is showing an interest in Kapital Banka while Piraeus has cast an eye on Universal. National and Alpha, by contrast, opened their own branches. According to analysts, the overhaul, which began in June last year, is now in its final phase. It was spurred by the realization of the need to restore confidence in the Yugoslav banking system and to battle the «mattress money» phenomenon which created increased liquidity, partly as a result of the appearance of private banks which operated as pyramid schemes. The program divided the country’s credit organizations into four categories: the viable concerns, those needing additional capital, those placed under the supervision of the Agency of Bank Rehabilitation and those placed under receivership or declared bankrupt. Within the framework of the program the government revoked the licenses of 19 banks that did not meet legal requirements, while in January 2002, the country’s four largest banks in terms of assets (Beobanka, Beogradska Banka, Jugobanka, Investbanka) were forced to declare bankruptcy. The banks in the first two categories qualified for privatization. The country’s central bank has already published a corresponding list according to the volume of deposits; top of the list is Raiffeisen Bank, Komercijalna Banka and Vojvodjanska Banka. Strategic goals