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Slovenia, EU to discuss postponement of NLB bank sale on Oct 26
October 18, 2017 / 1:34 PM / in 2 months

Slovenia, EU to discuss postponement of NLB bank sale on Oct 26

LJUBLJANA, Oct 18 (Reuters) - Slovenia’s finance minister Mateja Vranicar Erman will meet European Competition Commissioner Margrethe Vestager on Oct. 26 to discuss delaying the sale of state-owned Nova Ljubljanska Banka (NLB), the ministry said on Wednesday.

Slovenia had agreed to sell a 50 percent stake in NLB, the country’s largest bank, this year in exchange for the EU executive Commission’s approval of a 2013 rescue in which the government gave the lender 1.55 billion euros in state aid.

NLB is the biggest asset on the government’s privatisation list. A sale planned for June was cancelled, with the government saying the likely price, valuing the whole bank at a minimum of 1.1 billion euros, was too low.

“Considering all ... circumstances and possibilities the government believes it is best to postpone NLB’s privatisation,” the ministry said in a statement.

“Slovenian taxpayers fully covered the cost of state help to the bank in 2013 so it is not possible to agree to proposals that would mean an additional financial burden to taxpayers on account of lower price of the bank.”

The ministry also said it would not agree to sell off NLB’s units in the Balkans, which media reports have suggested the Commission might demand if the agreed stake sale does not go ahead. NLB has units in Serbia, Bosnia, Macedonia, Montenegro and Kosovo.

“The goal is to keep NLB as a strong regional bank group,” the ministry said.

The Commission has not said what it might ask of Slovenia if NLB is not sold.

The Slovenian government still controls about 45 percent of the banking sector, a much bigger share than in neighbouring countries which privatised their banks from the 1990s onwards.

The centre-left government sold Slovenia’s then second-largest bank, Nova KBM (NKBM), in 2015 to U.S. investment firm Apollo Global Management and the European Bank for Reconstruction and Development for 250 million euros.

No significant privatisations are expected before the next general election, which is due in June or July 2018. (Reporting by Marja Novak; Editing by Catherine Evans)

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