The bank did not specify the nature of the transactions to the internal bad bank, but the move comes after the leasing division of Hypo in Slovenia transferred soured assets to the bad bank in June and the bank was provided additional capital in March.

As part of the recapitalisation drive, the Slovenian subsidiary had transferred some of its non-strategic assets to TCK, Hypo's internal bad bank, already in October of last year, after EU-commissioned stress tests showed the bank needed EUR 221m in fresh capital.

The restructuring of the Slovenian subsidiary of Hypo is part of broader salvage efforts launched at the Austrian-based group which holds major interests in SE Europe.

As part of the EU-overseen restructuring, the entire group will be offloaded to a new owner.

In Slovenia, Hypo is reportedly intending to retain the banking and leasing divisions. However, it will put greater focus on retail banking and small business, after it was hit hard by its involvement in a number of major construction projects which collapsed together with the real estate market during the crisis.