"The European Commission has concluded that Slovenia's aid for Nova Ljubljanska Banka (NLB) remains compatible with EU state aid rules on the basis of a new commitment package submitted by the Slovenian authorities on 13 July 2018," the Commission said on Friday.

According to the release, Slovenia has "firmly committed to an ambitious time schedule for NLB's sale with a first sale tranche of at least 50% plus one share by the end of 2018", after the first attempt to sell the bank under the commitments made to the EU in exchange for allowing the 2013 bailout was halted by the government last year.

To compensate for the delayed sale, Slovenia put forward additional compensatory measures in addition to "strict deadlines to complete the sale of 75% minus one share of NLB".

Should the country fail to respect the deadlines, a trustee will be appointed to complete the sales procedure, while the key existing commitments, including a ban on re-entering businesses the bank has sold as part of the restructuring and the ban on acquisitions, have been prolonged.

"An important commitment in this regard is the return on equity commitment, which ensures that NLB can only grant new loans if the bank receives a minimum return on equity on those loans," the Commission said, noting that this would help ensure the long-term profitability of the bank and limit undue distortions of competition.

Under the new package, Slovenia also pledged to close additional branches in Slovenia and to sell its stake in its insurance arm NLB Vita unless the full sale is completed by the end of the year.

NLB will also issue a so-called Tier 2 bond or subordinated debt, "to further remove any viability doubts".

According to the Commission, "the new Slovenian commitment package is sufficient to remove the Commission's doubts concerning the long-term viability of NLB and distortions of competition to the Slovenian banking market".

European Competition Commissioner Margrethe Vestager welcomed the decision, noting that "the sale of NLB was an important remaining milestone of NLB's restructuring plan, which allowed us to approve over EUR 2bn of state aid to the bank in 2013".

According to her, Slovenia's commitments and today's decision ensure "that the bank will be a viable long-term player in the Slovenian banking market."

Slovenia sent the new proposal to Brussels in July, after the Commission had launched an in-depth investigation to assess whether Slovenia's proposed measures sufficiently compensated for delaying the sale beyond the end of 2017.

In the meantime, privatisation procedures have already been launched to sell the bank via an initial public offering (IPO). According to unofficial information, they are expected to be finalised on 14 November when NLB shares will be listed on the Ljubljana and London stock exchanges.

It is in the Commission's and the state's interest that as much shares as possible are sold in the first go to avoid doubling the costs and the risk of a lower price in a potential second stage, planned by the end of 2019.

The procedure is expected to be conducted in a similar way as it had been planned in the initial attempt last year, before the government halted the process over fears that the unresolved issue of claims in Croatia stemming from Yugoslav-era deposits of Croatian citizens with the defunct Ljubljanska Banka (LB) would lower the price.

To ensure a better price in this attempt, the National Assembly passed in July a bill that shields NLB from those claims. According to the Finance Ministry's assessment, the law shielding NLB from Croatian claims saved at least EUR 700m.