The merger of Slovenia's second and third largest banks, NKBM and SKB, has been formally completed, creating a bank that will be the second largest player on the banking market.

The formal merger was completed on 22 August when SKB ceased to exist as an independent entity and was merged into NKBM. The bank will now be renamed OTP Banka.

In operational terms - IT support, client support and the numbering and branding of bank accounts - the merger will be wrapped up by 2 September, the bank has said.

The merger marks the latest chapter in an intense consolidation of the Slovenian banking market spearheaded by OTP, a large Hungarian bank.

OTP entered the Slovenian market in 2019 with the acquisition of SKB from France's Societe Generale and went on to buy NKBM in 2021 from the US private equity fund Apollo and the European Bank for Reconstruction and Development.

The NKBM-SKB merger has now created a bank that rivals market leader NLB.

At the end of last year, NLB had a 31.1% share of the Slovenian banking market by assets, while NKBM and SKB had a combined market share of 29.9%.

All other banks have market shares well below 10%.

The merger is not without their critics with commentators voicing concern about market concentration, warning that Slovenia now has what is effectively a duopoly.

In view of the proximity of OTP to the Hungarian government, some analysts have also warned that Hungary will now have a major say on the Slovenian financial market and could steer lending decisions in a way that benefits Hungary rather than Slovenia.