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State Provides EUR 320m to Complete NLB Capital Increase

Ljubljana, 02 July (STA) - Slovenia has provided on Monday a EUR 320m hybrid loan to the state-owned NLB bank, only hours after two state-run funds injected EUR 61m into the bank. The recapitalisation brings NLB's Core Tier 1 capital ratio to 9% as required by the European Banking Authority and Slovenia's central bank.

In total, the bank has increased it capital by more than EUR 500m through a series of complex, co-dependent and coordinated activities by the state and the bank, NLB said in a press release.

Apart from the hybrid loan and recapitalisation, the activities also included restructuring of existing subordinate instruments, the bank said.

The recapitalisation was approved today by the European Commission, which tasked Slovenia to find a new partner in NLB ownership in six months.

The recapitalisation was completed two days after the deadline set by the European Banking Authority, as NLB's second biggest owner, Belgian financial group KBC, withdrew unexpectedly on Friday.

The EUR 61m KBC was expected to contribute were provided today by the SOD and KAD funds. After the recapitalisation, the state has just over 40% in the bank, the KAD and SOD funds hold nearly 19%, while KBC is left with some 22%.

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