FT: Alta Bank under international scrutiny over money laundering suspicions, Russians kept all their savings there

The National Bank of Serbia has revoked Alta Bank's operating licence. The bank, which is "used by Russians", is "under international scrutiny over suspicions of money laundering", according to the Financial Times (FT).

The National Bank of Serbia announced on Saturday that it had decided to shut down Alta Bank because "the bank's financial condition had deteriorated significantly and there was a possibility of further deterioration", including a further decline in its liquidity, the Financial Times reported.

The decision came less than a week after Serbia's long-serving leader Aleksandar Vučić lost the election to the student movement, which had been protesting against his alleged corruption and increasingly authoritarian rule, the British newspaper noted.

Alta's banking operations have been suspended, and several customers told the Financial Times that they had been unable to withdraw money since Saturday. Serbia's deposit insurance scheme covers deposits of up to €50,000 per depositor, according to the Deposit Insurance Agency.

Serbian officials told the Financial Times that, in the days following the election, Alta customers had withdrawn large sums of money and transferred substantial amounts abroad.

According to people familiar with the matter, Alta played a significant role in facilitating money transfers into and out of the Balkan country on behalf of Russian individuals and legal entities following Russia's invasion of Ukraine in 2022.

They said Alta was one of the few banks in Serbia willing to provide services to both Russian individuals and businesses.

Alta had previously come under the scrutiny of the European Central Bank (ECB) over suspicions of money laundering. The ECB investigation raised serious concerns about the Serbian banking group's operations, with officials questioning whether the bank was able to verify the legitimate origins of its deposits.

The bank's closure is particularly affecting the Russian expatriate community in Serbia, several Russian nationals holding Russian passports and living in Belgrade told the Financial Times.

By the end of last year, approximately 55,000 Russian nationals held residence permits in Serbia, more than ten times the number recorded before the invasion. They represent the largest group of foreign nationals in the Balkan country.

Pavel Belavin, a Russian journalist now living in Belgrade and an Alta customer, said that his accounts at the bank had been frozen since Saturday.

The bank's app had been working intermittently, allowing customers to check their account balances but not carry out any other transactions, he said. He added that he had received no instructions from either Alta or the National Bank of Serbia regarding what would happen to his accounts.

Belavin said Alta had been the most popular bank among the Russian community because it allowed Russian nationals to open both personal and business accounts.

Olga, a financial consultant who emigrated from Russia, said she had been receiving messages from distressed Russian clients who had kept "all their family savings" at the bank.

Among them was one client who had recently deposited "€300,000 from the sale of an apartment in Russia".

In 2022, Alta announced that its foreign exchange risk had risen to 42 per cent, exceeding the maximum threshold of 20 per cent, due to a significant inflow of roubles "as a result of the war and EU sanctions against Russia", the FT reported.

This indicator measures the difference between a bank's foreign currency assets and liabilities relative to its regulatory capital, reflecting its exposure to exchange rate fluctuations.

Alta's customer deposits had increased more than fivefold by the end of last year compared with the period before the war.

On Saturday, the Prosecutor's Office for Organised Crime called on Serbian authorities "to investigate Alta's operations, as well as the officials responsible at the National Bank of Serbia, in connection with the possible outflow of funds from Alta's accounts and transfers of money abroad".

"Within a leaderless movement expected to take power in Serbia"

The Student electoral list, which is expected to secure a parliamentary majority within a month and form a government by the end of January, also called for a thorough investigation, the FT noted.

- The problems in Alta Bank's operations did not emerge overnight - the Student List said in a statement.

The FT also quoted another part of the statement, which read:

“There are indications that this situation is the result of a delayed response by the regulatory authorities... as well as the failure of the prosecution to act and freeze assets acquired through corruption."

Alta Bank did not respond to the FT's request for comment.

The bank's parent company, Alta Pay, is owned by Davor Macura, one of Serbia's most prominent entrepreneurs, who has attempted to leave Serbia at least twice in recent weeks, according to officials cited by the FT.

In mid-October, Macura was prevented from leaving an airport in neighbouring Montenegro.

- Mr Macura was not informed of any reason for the travel ban - the bank said on 14 October, adding that the restriction had been imposed "without any explanation, factual basis or evidence"

"Sources: He tried to flee to Moscow"

Following the election, Macura attempted to flee to Moscow, people familiar with the situation told the Financial Times.

Macura did not respond to a request for comment. 

Miloš Damnjanović, an analyst at the Belgrade-based consultancy BIRN, described the Alta Bank case as an indication of a change of regime.

- The revocation of Alta Bank's operating licence indicates not only that Vučić's clientelist regime is falling apart faster than expected - Damnjanović said.

He added that there are people within the system who want to take part in dismantling it.

Macura, a businessman with close ties to the Serbian Progressive Party, was detained this morning, Nova.rs reports.

Police had previously been conducting a search of Alta Bank's premises for more than 30 hours, since Saturday. The bank's operating licence was revoked early on Saturday morning by the Executive Board of the National Bank of Serbia, and bankruptcy proceedings were initiated.