Business News

NLB to Look for Alternatives to Capital Injection

Ljubljana, 24 May (STA) - Prime Minister Borut Pahor, Finance Minister Franc Krizanic and Development Minister Mitja Gaspari met on Monday the chairman and chief supervisor of the NLB bank, making an agreement that the state-owned bank will soon come up with different scenarios for a capital injection.

Chief supervisor Marko Simoneti and chairman Bozo Jasovic acquainted the government officials with the strategy of the NLB group in the 2010-2015 period, which is expected to be confirmed by the supervisory board on Thursday.

According to a press release from the prime minister's office, the officials agreed that the "common interest is a strong and successful bank".

The NLB has been awaiting approval for a EUR 250m capital injection since the end of 2009, when the bank drafted a plan for the capital injection.

The plan has been amended and is expected to be discussed by the supervisors on Thursday together with the strategy.

The government has drafted a supplementary budget, but it does not envisage money for a capital injection at the bank.

Krizanic has however said that a capital raising at the NLB will be necessary sooner or later, expressing hope that other investors would join and that the injection would not be understood as state aid.

Jasovic agrees with Krizanic that the bank needs fresh capital. He said recently that the state would have to decide whether it wants to stay majority owner of NLB and, if so, provide capital increase.

Krizanic also announced that the European Bank for Reconstruction and Development (EBRD) would re-enter the NLB as it wanted to support the Slovenian financial sector. The EBRD acquired a 5% stake in the NLB in 2002, but sold it in 2008.

The NLB started selling today an issue of subordinated 7-year bonds which carries a fixed annual interest rate of 6.25%. Subscription for the EUR 100m issue is open until 24 June.

You might be also interested in:


We are here to help you.