Maribor, 13 May (STA) - International credit rating agency Fitch Ratings has lowered the long-term credit rating of NKBM, Slovenia's second biggest bank, from A- to BBB+. The short-term rating was preserved at F2 and also remaining stable is the assessment of future developments, NKBM said in a press release on Friday.
NKBM, which recently carried out a EUR 104m capital rise with the issuing of new shares that were mostly bought by state-owned companies, said that bank is not violating crediting commitments as a result of the lower rating.
"Although Fitch took into account that the state has preserved its roughly 51% stake in NKBM, it also considered the conflicting official statements about the preservation of the state stake, which were given during the capital increase procedure, as well as the absence of a clear government strategy regarding the future ownership structure," NKBM wrote.
The agency feels that given the relatively high value of unsecured bad loans in NKBM's portfolio and the exposure to the troubled construction and real estate sectors and to financial holdings, the capital adequacy of the bank remains low.
When considering the relatively modest profit before impairments and provisions, and modest demand for fresh loans, the level of NKBM's internal capital growth is also low, Fitch Ratings argued.
NKBM's Tier I capital ratio stood at roughly 8.2% at the end of the first quarter or at 10.2% when taking into account the capital increase carried out in the second quarter.
The bank's liquidity reserves, which stood at EUR 760m at the end of the first quarter, remain adequate given its refinancing needs this year. NKBM said that the total loans due for repayment by the bank by the end of the year stand at around EUR 550m.