Ljubljana, 12 May (STA) - NLB chairman Bozo Jasovic has labelled for the STA the bank's first positive quarter after five in the red a good sign, while noting it is still too early to say whether things are finally changing for the better.
Jasovic argued that economic growth still was not what it could be, but added that the bank's management hoped that the positive trend would persist and was holding on to its plan to end the year in the black.
The management of the country's biggest bank, which is in majority state ownership, moreover continues to expect an additional EUR 180m in impairments and provisions at the level of the core bank by the end of the year. An extra reserve has been created for the case that additional needs arise.
Jasovic explained that a change in provisions policy cannot come before the clients involved start meeting their obligations and before their capacity to do so is confirmed for a longer period.
He pointed to the recent capital increase, which also strengthened capital adequacy, raising the Tier 1 ratio by 1.8 percentage points to 7.8%, while the Core Tier 1 ratio stands at 6.5%. The bank's goal is to raise the Tier 1 ratio to between 9% and 10%.
Asked about the implementation of the strategy for the period up to 2015, Jasovic highlighted the successful sale of NLB Banka Sofia and ongoing activities for the sale of LHB Frankfurt and the Vienna-based Adria Bank as well as of capital shares that are not part of the bank's core activities.
NLB moreover received several non-binding bids for its 57.21% stake in Banka Celje, while the offloading of other non-strategic investments is also running in line with plans, he said.
In 2011, NLB hopes to secure EUR 600m through sales, divestment and a reduction in risk weighted assets, although this also involves risks, which is why backup plans have been drawn up.
As regards this year's liabilities to foreign banks, Jasovic said that EUR 740m were due between April and the end of the year and that, as always, the bank would meet its commitments.
Moreover, talks are under way with foreign banks on taking out a syndicated loan, while the NLB is also considering a bond issue without state guarantees.
According to Jasovic, NLB wishes to diversify its refinancing options, while also reducing dependence on loans from foreign financial markets.
Touching on the potential sale of a majority stake in retailer in Mercator as part of a consortium of banks, Jasovic said that NLB, which is the unofficial coordinator of the consortium, expects that Pivovarna Lasko will participate in the sale.
He said that with the exception of Croatian retailer Agrokor, which was biding for the separate share held by the Lasko beverage group, and some known investment funds there were no new strategic investors on the horizon as yet.
As regards the possibility of reprogramming the loan owed to NLB by Lasko, Jasovic said he could not comment on an individual client. However, as with other clients who had problems in the past, Jasovic believes that common ground will also be found this time.