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UPDATE 1-Slovenian government opposes partial sale of bank NLB
November 9, 2017 / 2:12 PM / a month ago

UPDATE 1-Slovenian government opposes partial sale of bank NLB

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By Marja Novak

LJUBLJANA, Nov 9 (Reuters) - Slovenia opposes a partial sale of its largest bank Nova Ljubljanska Banka and said its talks with the European Commission on NLB’s future were very difficult.

“The government has rejected any form of sale of NLB,” Finance Minister Mateja Vranicar Erman told a news conference on Thursday.

Slovenia agreed to sell a majority stake in NLB by the end of 2017 in exchange for the European Commission’s approval of state aid for the bank in 2013.

But in June the government abandoned the planned sale of 50 percent of NLB, saying the suggested price of a minimum of 1.1 billion euros ($1.3 billion) for the whole bank was too low.

It is now in talks with the European Commission on what to do with NLB, but Erman said the talks were “constructive but very difficult”.

Last month the Commission rejected Slovenia’s proposal to delay the sale of the bank by up to three years and suggested a small part of the bank be sold to selected buyers ahead of an initial public offering.

Slovenian officials are due to meet the head of the European Commission Jean-Claude Juncker and the EU Competition Commissioner Margrethe Vestager on Friday and Vranicar said Slovenia would propose that NLB pays a financial compensation in order to avoid the sale of the bank or its units.

She said the government would suggest that NLB pays compensation of some 365 million euros into a local cohesion fund that would finance small and medium-sized firms and help foster healthy competition in the country.

The Commission had suggested that NLB would have to sell its Balkan units if the majority of the bank is not sold by the end of the year. Slovenia believes that could be avoided by NLB paying 365 million euros - which corresponds to the price the government would expect to fetch if it sold NLB’s Balkan units - into the cohesion fund.

“If needed we are ready to seek other compensation measures in cooperation with the Commission,” added Erman.

NLB, which received 1.55 billion euros in state aid in 2013, returned to profit in 2014 after six years of losses. Outside of Slovenia it owns banks in Serbia, Bosnia, Macedonia, Montenegro and Kosovo.

$1 = 0.8602 euros Reporting By Marja Novak; Editing by Susan Fenton

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