Business News

Councillors Warn against Sale of NLB

Ljubljana, 13 July (STA) - The National Council, the upper chamber of parliament, on Tuesday urged against the sale of stakes in Slovenia's leading bank, NLB, or other changes in the bank's ownership structure that would reduce Slovenia's controlling rights.

The National Council also urged the government to thoroughly examine its decisions on potential ownership structure at NLB, while bearing in mind the bank's importance for the Slovenian economy.

The councillors believe the government should not try to solve the bank's business difficulties through a rushed sale counting on it that the new owner would resolve them in a way beneficial for Slovenia.

Before the announced capital injection or sale of stakes in the bank, the government should pore over the bank's operations in the past years, the councillors said in a resolution passed today.

Councillor Andrej Rus said that too little effort had been done to tackle the situation at the bank, while Branko Majes noted that NLB was an excellent bank as long as its operations had been concentrated in Slovenia.

Councillor Stojan Binder, who represents employers, maintained that NLB should stay majority state-owned. He argued that the main problem was proper oversight and management of this institution.

The fact that the state has its own bank is the only guarantee that Slovenian companies will get the necessary funds to penetrate foreign markets, Binder said.

The issue of potential sale of state-owned stakes in NLB reemerged as the bank is seeking EUR 250m in fresh capital.

The first attempt at capital injection fell through in December 2009 after the state and the Belgian banking group KBC, which owns about 30% in NLB, failed to find common ground on the issue.

Prime Minister Borut Pahor and some members of his cabinet met NLB officials last week to exchange views on various options for the capital injection.

The NLB suggested three scenarios: that the owners supply most of the needed fresh capital and keep their stakes; that a new owner enters ownership structure, or an initial public offering, which would be quite demanding.

Finance Minister Franc Krizanic announced in Brussels today that Slovenia would take appropriate measures to support NLB after the results of the ongoing stress tests of European banks are published.

Meanwhile, the National Assembly, the lower chamber of parliament, decided to discuss the issue at the next parliamentary session.

In line with Tuesday's decision, MPs will discuss Pahor's response to the question concerning NLB from SLS deputy Radovan Zarjav during Monday's question time. The opposition People's Party (SLS) is against the sale of state stakes in banks, while Pahor believes a strategic investor would be welcome at NLB.

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