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EU clears NLB capital hike, to probe revamp plan
July 2, 2012 / 9:56 AM / 5 years ago

EU clears NLB capital hike, to probe revamp plan

BRUSSELS, July 2 (Reuters) - EU competition regulators temporarily cleared a 383 million euro ($486 million) capital boost for NLB on Monday and will study a revamp plan for Slovenia’s largest bank to ensure it addresses the bank’s problems and does not give an unfair advantage.

Slovenian authorities plans to inject more capital into NLB (Nova Ljubljanska Banka) to meet EU solvency requirements after Belgian shareholder KBC decided not to subscribe to a new share issue.

The European Commission said the capital infusions complied with EU state aid rules.

“The Commission has therefore approved them for six months, to give NLB and Slovenia time to submit an updated restructuring plan, taking due account of this additional state support,” the EU executive said in a statement.

It also opened an in-depth investigation into NLB’s restructuring plan, which was submitted after the bank received regulatory clearance for its first capital increase.

The EU watchdog said it was concerned that the bank’s own contribution to the costs of restructuring may be insufficient. It also wants to verify that the plan contains sufficient safeguards to limit the distortions of competition due to the state aid. (Reporting by Foo Yun Chee; editing by Rex Merrifield)

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