The Slovenia Times

Five Banks Recapitalised, Contracts on Bad Loans Transfer Signed



The recapitalisation includes a EUR 1.551bn capital boost for the NLB bank, EUR 870m for NKBM, EUR 348m for Abanka and a total of EUR 445m for the liquidated private banks Factor banka and Probanka.

Shareholders and holders of junior debt contributed a total of EUR 505m to the covering of losses at the five banks, the Finance Ministry said in a press release. NLB will account for EUR 257m of this figure, NKBM 64m and Abanka EUR 120m.

The combination of the erasure of existing share capital and the recapitalisation has resulted in the following changes in share capital for the three largest banks: from EUR 184m to EUR 200m for NLB, from EUR 143m to EUR 150m for NKBM, and from EUR 7.2m to EUR 150m for Abanka.

This means the state has become the sole owner of all three banks and the shares of NKBM will no longer be listed on the Ljubljana and Warsaw stock exchanges.

The bank restructuring plan involves the commitment that NLB and NKBM are privatised, with NKBM to be completely sold off by 2016 and NLB privatised until 2017, whereby the state plans to retain 25% plus one share in the bank.

The in-cash contributions from the state amount to EUR 1.141bn for NLB, EUR 620m for NKBM, EUR 348m for Abanka, and EUR 160m each for Factor banka and Probanka.

Abanka is looking at another EUR 243m in the form of bonds after full approval from the European Commission, which has given the bank two months to send a full restructuring plan, while already issuing full approval for the restructuring plans of NLB and NKBM, the two largest banks in the country.

Moreover, the Bank Asset Management Company (BAMC), Slovenia's bad bank, already signed contracts with NLB and NKBM on the transfer of bad loans. The transfer of the first package of bad claims is expected on Friday as final details are still being negotiated.

This was confirmed by NLB CEO Janko Medja, who said that the entire transfer process will take several months and is planned to be completed by the end of April.

As regards the capital increase, Medja explained that the state had used a deposit it had with NLB, which will have no affect on liquidity.

Based on the recently revealed results of the stress tests for Slovenian banks, toxic assets worth around EUR 3.45bn gross will be transferred from the state-owned NLB and NKBM at a transaction value of around EUR 1.1bn.

NKBM, which is envisaged to transfer EUR 422m worth of toxic assets, announced today it would first start transferring bad claims to companies undergoing receivership proceedings.

The top three banks will transfer assets worth EUR 4.5bn at a transaction value of EUR 1.68bn in exchange for state-backed bonds issued by BAMC.

Finance Minister Uroš Čufer commented on today's developments by saying that everything, including the Constitutional Court's rejection of a petition to stay legislation introducing EU-wide bail-in rules, is running according to plans.


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