Moody's said the bank would need a further capital injection to maintain capital adequacy above the European Banking Authority's (EBA) regulatory guidelines.

It also sees "sizeable provisioning needs undermining its already weak capital base", and it expects a further deterioration in asset quality given the weak economic trends and difficulties in Slovenia's highly-leveraged corporate sector.

NKBM said neither the downgrade nor the recent collapse of the NKBM share price affected the bank's regular operations.

"The bank is planning to secure the recommended EBA capital adequacy with activities that have already been plotted out," the statement from NKBM reads.

The junior subordinate ratings were downgraded to C(hyb) from Caa3(hyb), the bank's standalone E bank financial strength rating (BFSR) has been affirmed, and its baseline credit assessment was lowered to caa3 from caa1.

The downgrade comes after NKBM reported a larger-than-expected group operating loss of EUR 205m for 2012 in early March.

Just a week later it was effectively renationalised when a hybrid EUR 100m loan by the state was converted into equity, rising the state's direct stake from 27% to 79%.

In the aftermath of the news the NKBM share price collapsed. It is now trading at 79 cents, down from this year's peak of 1.45 EUR of early March.