February 20 (SeeNews) - Slovenia's Nova Ljubljanska Banka (NLB) has paid 813,000 euro ($1 million) in compensation to Croatian banks following two court rulings on Yugoslav-era savings deposits, Slovenian media reported,
News agency STA reported on Monday, citing unofficial data, that NLB has paid to Croatian banks 467,000 euro under to a court ruling from February last year and a further 346,000 euro under a ruling issued in October.
Between 1994 and 1996, Croatian lenders Zagrebacka Banka and Privredna Banka Zagreb had filed a total of 27 lawsuits against Ljubljanska Banka (LB), the defunct bank from which NLB originated, STA said.
NLB was taken to court in Croatia over the deposits repaid to the bank's former customers in Croatia by the two Croatian banks. The deposits became Croatia's public debt, which the country then decided to seek compensation for in court.
The court cases were merged into 15 procedures in Croatian courts, STA explained, adding that final rulings have only been reached in three of them, so it can be expected that NLB will be forced to reimburse other claims in the future.
In two cases the courts ruled for Croatia, while one was won by Slovenia.
Slovenia has asked its neighbour to drop the cases, invoking an agreement signed in 2013 which said that NLB deposit cases would be resolved as part of the Yugoslavia succession treaty of 2001. The treaty regulates the rights and obligations of successor states to the former Yugoslav federation.
In January, the European Commission said it has opened an in-depth investigation to assess whether new measures for the restructuring of NLB proposed by Slovenia sufficiently compensate for delaying the bank's sale beyond end-2017.
The partial sale of Slovenia's shares in NLB is a key commitment to ensure NLB's long-term viability, on the basis of which the Commission was able to approve significant state aid of up to 2.32 billion euro to NLB in December 2013.
In May 2017, Slovenia requested a gradual sale of its shares in NLB in two tranches, which the Commission approved. However, after putting the sale of NLB on hold in June 2017, Slovenia did not complete the sale of a first tranche of its shares in NLB before the end of 2017.
Slovenia has argued that it needed to halt the sales procedure because of "the excessive impact on price caused by the issue of transferred foreign currency deposits in Croatia".
On December 21, 2017, the Slovenian authorities formally notified the EC of a new commitment package to replace its existing commitment on the sale of 75% of its shares in NLB. This proposal foresees a significant extension of the sales deadline and proposes the appointment of an independent trustee that would exercise the state's shareholder rights until the sale has been completed.
Finally, Slovenia proposes that all other existing commitments cease to apply as of December 31, 2017.
Slovenian media are speculating that the Commission could now demand the recovering of the state aid that NLB had received.
($=0.810140 euro)
Zagrebacka Banka d.d. is among the biggest banks in SEE. You can download our SEE Top 100 ranking
here or subscribe to our free Top 100 newsletter
here