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NLB Shareholders Confirm EUR 250m Capital Increase

Ljubljana, 25 November (STA) - Shareholders of Slovenia's largest bank, NLB, confirmed on Thursday a EUR 250m capital increase designed to bolster the bank's capital and help it meet new regulatory requirements.

The proposal was confirmed despite opposition by the second-largest shareholder, Belgian banking group KBC.

KBC had put forward its own proposal for a EUR 250m capital hike comprising EUR 200m in cash and EUR 50m in hybrid instruments, but it was not confirmed.

"The goal has been achieved: we will get the capital and demonstrate capital firmness," NLB boss Bozo Jasovic said.

The State Enterprise Asset Management Agency, which put forward the capital increase proposal at the AGM on behalf of the state as the biggest shareholder, expects the bank to follow the recently adopted five-year strategy.

The strategy determines that NLB will withdraw from Austria, Bulgaria, the Czech Republic, Germany and Slovakia, abandon non-core activities such as property leasing and factoring, and offload its 41% stake in Banka Celje.

With EUR 250m, the bank can also fulfil the requirement by the central bank to increase Tier 1 capital until March, said the agency's board member, Bojan Pecenko.

The disinvestment, coupled with deleveraging, is expected to result in a capital adequacy ratio of 11% and Tier 1 capital of 9% in 2013.

The shareholders also appointed Anton Macuh a new member of the supervisory board representing the state to replace a supervisor who stepped down in June.

NLB reported a EUR 50m net loss for the first nine months of the year, blaming continuing weakening of its loan portfolio for the red numbers.

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