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Slovenia to seek EC approval to postpone NLB sale

Author Maja Garaca
Slovenia to seek EC approval to postpone NLB sale NLB Banka Beograd headquarters in Belgrade Source:

LJUBLJANA (Slovenia), October 18 (SeeNews) - Slovenia's government said on Wednesday it will seek the European Commission's approval next week to postpone the sale of Nova Ljubljanska Banka (NLB).

Finance minister Mateja Vranicar Erman is set to meet Competition Commissioner Margrethe Vestager on October 26 in Brussels, where they will discuss the future of Slovenia's largest bank, the government said in a statement following a weekly session.

"Taking into account all the circumstances and possibilities, the government still estimates that it is most appropriate to postpone the privatisation process of NLB," it noted.

The government argued that if it goes ahead with the privatisation, the process would be impeded to a great extent by lawsuits launched against NLB in Croatia over Yugoslav-era savings deposits. Namely, NLB had been taken to court in Croatia over the deposits repaid to the bank's former customers in Croatia by Croatian banks, which then decided to seek compensation from the Slovenian bank in court.

This situation would drag down the price of the bank, the government said.

"It is the view of the government that this issue can not be addressed by unilateral measures, but only at the interstate level, and will therefore step up efforts in this direction", the government said and added that the immediate sale of NLB would also hurt Slovenian taxpayers, by placing additional financial burdens on them.

"Our aim is to maintain NLB as a strong regional banking group," the government concluded.

On June 8, the government refused to approve a minimum offer price and an offer price range for NLB shares, following which the procedure for the sale of the bank via an initial public offering (IPO) was cancelled.

NLB showed a minor capital shortfall under the adverse scenario of the stress test conducted by the European Central Bank in October 2014.

NLB has been 100% state-owned since 2013, when the Slovenian government stepped in to recapitalise it and two other lenders - NKBM and Abanka, narrowly avoiding an international bailout. The same year, Slovenia committed to the European Commission to sell part of NLB within four years.