Ljubljana, 01 March (STA) - The supervisors of NLB adopted on Friday a new strategy for the group around Slovenia's largest bank for the 2014-2018 period, which highlights a focus on the market segments and markets where NLB can secure or preserve a place among the top three banks in terms of profitability or market share. In-depth reorganisation is also to continue.
After reporting a record group net loss of EUR 1.44bn for 2013, the state-owned bank said that the group's strategic firms will strive for an average capital return of 10% and for more than 15% market shares on markets where it is present or more than 20% in the case of the Slovenian market.
The banks in the group will aim to reduce the cost to revenue ratio below 60%, while trying to preserve high liquidity and security of clients' deposits.
Six universal banks in SE Europe remain in the strategic core of the group: two in Bosnia-Herzegovina (NLB Razvojna banka and NLB banka Tuzla) and one each in Macedonia (NLB Tutunska banka Skopje), Montenegro (NLB Montenegrobanka), Serbia (NLB banka Beograd), and Kosovo (NLB Priština).
Also defined as strategic are the insurance segment (NLB Vita, Skupna and Nov penziski fond), asset management in NLB Skladi and ATM network operator Bankart.
In line with the restructuring plan commitments, given to the European Commission because of state aid, the NLB group will partly or entirely withdraw from non-strategic segments, including the funding of financial holdings, construction and transport, factoring and real estate leasing, and cross-border funding - an exception being deals of Slovenian companies abroad.
The reorganisation programme is meanwhile also continuing and will include a further reduction of the workforce. By the start of 2015 the number of employees is expected to be down 20% compared to the end of 2012 when it stood at 3,572. In the first wave it was reduced by 228, while 141 more are to follow.
NLB moreover puts an active approach to clients in the centre of the strategy and is convinced that changes can already be noticed. Although the crisis and the Cyprus scare contributed to a decline in household and company deposits last year, the bank is already seeing a reversal of the trend this year.
NLB is ready to fund companies with good projects and is processing around EUR 300m worth of investment deals each month, a third of which are completed and a quarter of these are completely new.
The bank moreover plays and active role in the restructuring of overindebted companies, saying it is aware of the importance of salvaging the healthy cores of companies.