January 26, 2018 / 11:39 AM / a year ago

EU opens in-depth investigation into Slovenia's NLB bank

BRUSSELS/LJUBLJANA (Reuters) - The European Commission said on Friday it had opened an in-depth investigation into new commitments made by Slovenia regarding the restructuring of its top lender, Nova Ljubljanska Banka (NLB).

Slovenia's national flag flutters next to Nova Ljubljanska Banka (NLB) building in Ljubljana July 23, 2012. REUTERS/Srdjan Zivulovic/Files

Slovenia, which fully owns the bank, pledged to sell 75 percent of NLB by the end of 2017, but put the sale plan on hold last June.

It said the expected price, which would value the whole bank at a minimum of 1.1 billion euros ($1.37 billion), was too low.

The government, which injected 1.55 billion euros into NLB in 2013 to prevent it from collapsing under a large amount of bad loans, notified the Commission of a set of new commitments in December.

Its proposals consist of an extension of the deadline for the sale until 2019 as well as the appointment of an independent trustee to oversee shareholders rights in the meantime.

“At this stage, the Commission has doubts whether the new Slovenian proposal can be considered equivalent to Slovenia’s original commitment,” the Commission, which oversees competition policy in the European Union, said.

Slovenia’s finance ministry gave no immediate comment on Friday.

On Thursday, Finance Minister Mateja Vranicar Erman told reporters she did not expect that the European Commission to order NLB to return the state aid.

“After the European Commission decides (about our proposal), the government has one month to respond. During this time there is room for constructive talks,” Erman said.

($1 = 0.8029 euros)

Reporting by Robert-Jan Bartunek, additional reporting by Marja Novak in Ljubljana; editing by Philip Blenkinsop and Jason Neely

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