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Five Banks Recapitalised, Contracts on Bad Loans Transfer Signed

Ljubljana, 18 December (STA) - Following a nod from the European Commission, Slovenia launched on Wednesday aid measures for five Slovenian banks, securing EUR 3.2bn in capital injections and signing contracts on the transfer of toxic assets to the bad bank.

The recapitalisation includes a EUR 1.551bn capital boost for the NLB bank, EUR 870m for NKBM, EUR 348m for Abanka and a total of EUR 445m for Factor banka and Probanka.

Shareholders and holders of junior debt contributed a total of EUR 505m to the covering of losses at the five banks, the Finance Ministry said in a press release.

Moreover, the Bank Asset Management Company (BAMC), Slovenia's bad bank, already signed with NLB and NKBM, the two largest banks in the country, contracts on the transfer of bad loans. The transfer of the first package of bad claims is expected on Friday as final details are still being negotiated.

Based on the recently revealed results of the stress tests for Slovenian banks, toxic assets worth around EUR 3.45bn gross will transferred from the state-owned NLB and NKBM at a transaction value of around EUR 1.1bn.

The top three banks will transfer assets worth EUR 4.5bn at a transaction value of EUR 1.68bn in exchange for state-backed bonds issued by BAMC.

While the European Commission issued its final approval to the restructuring plans for the NLB and NKBM banks, only a provisional approval came for the state aid planned for Abanka Vipa, the No.3 bank, which has been given two months to send a full restructuring plan.

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