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Slovenian Banks Not Expecting Problems in Meeting Basel III

Ljubljana, 13 September (STA) - Banka Slovenije, Slovenia's central bank, does not expect Slovenian commercial banks to have problems in meeting the new bank capital adequacy rules adopted in Basel on Sunday.

In a reaction to the Basel III rules agreed by central bank governors and bank regulators from 27 countries, Banka Slovenija said that Slovenian banks for the most part already hold sufficient amounts of top-quality capital.

Under the new rules, whose adoption was welcomed by Banka Slovenije today, the required ratio of Tier 1 capital will be raised from the current 4% to 6% in the coming years.

Slovenian commercial banks for the most part only hold shares and retained profit, both of which qualify as top-quality capital, the central bank pointed out in its statement.

According to the bank's figures, the average ratio of Tier 1 capital in Slovenian banks is currently 9.11%.

Even though the figure varies among the institutions in Slovenia, the new rules should not require major capital raising efforts in Slovenia, the bank added.

However, it warned that this did not apply to the capital conservation buffer of 2.5% - intended to increase bank resilience to shocks - which will come into full force in 2019 under the new rules.

Slovenia's second largest bank, NKBM, also welcomed the new rules, saying that would introduce a single definition of capital and help boost stability in the banking system.

The NKBM said its current group Tier 1 capital ratio stood at 8.21%, which meets the new capital adequacy standards.

Another Slovenian bank, Abanka, also does not expect the new rules to force it into efforts to raise capital. The bank assesses its Tier 1 capital ratio stood at 12% in the first half of 2010.

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