Serbia Revokes License of Alta Banka Days After Elections

The Central Bank of Serbia revoked the license of Alta Banka AD, a Belgrade-based institution owned by the Alta Group, citing a deterioration in its financial condition, according to Bloomberg. This action came days after parliamentary elections in the country, which brought a significant shift in the distribution of power.

Administrative Management Imposed

The credit institution, which saw a rapid rise during more than a decade of rule by long-time Serbian leader Aleksandar Vucic, now faces immediate administrative management by the Serbian Deposit Insurance Agency. The regulator decided to take this step to protect depositor interests and maintain financial system stability.

Alta Banka confirmed that it has been placed under administrative management without providing details. The bank stated that it is cooperating to protect the interests of depositors and creditors.

During the last decade, Alta Banka grew from a network of exchange offices, expanding its business activities and securing favorable contracts with Serbian authorities, which were long dominated by Vucic’s Progressive Party. At the October 25 elections, the party lost to the “Student List” – a newly created movement that won a majority in the 250-seat parliament but has not yet formed a new government.

Criminal Investigation Underway

“There is a risk of further deterioration of the bank’s financial condition or liquidity, exposing depositor interests to risk,” stated the Serbian central bank.

The Serbian prosecutor for organized crime informed via email that on Thursday they requested the central bank to gather information regarding the “outflow of cash sums from Alta Banka accounts to unspecified destinations abroad.” Following this, the central bank filed a complaint against the bank and its representatives, prompting special forces from the Ministry of Interior to launch an investigation into Alta Banka.

On Saturday, armed police were seen outside the Alta Banka office in Belgrade, local television N1 reported.

In a separate statement, the Deposit Insurance Agency said it will begin paying guaranteed sums to Alta Banka depositors within seven days after the Commercial Court officially initiates proceedings for imposing forced administration on Alta. Under Serbian legislation, sums are guaranteed up to 50,000 euros or the equivalent in dinars.

According to the central bank, in July Alta Banka assets amounted to about 215 billion dinars, representing slightly under 3% of the total banking sector volume in Serbia. The Alta Group holding company expanded its activities in recent years in leasing, construction, and hospitality.

The Vienna-based Raiffeisen secured the support of 56.2% of Addiko shareholders, including Alta Group, for the takeover earlier this year. As part of this offer, Raiffeisen stated it will sell Addiko’s subsidiaries in Serbia, Bosnia and Herzegovina, and Montenegro to Alta after the deal is successfully completed. The company also expanded its operations in neighboring Montenegro and North Macedonia.