Slovenia's state aid for Nova Ljubljanska Banka (NLB) has been ruled by the European Commission (EC) to be compatible with European Union (EU) State aid rules.
Image: EC approves new Slovenian commitment package for NLB Bank. Photo: courtesy of NLB d. d.
The EC came to the conclusion based on a new commitment package filed by the Slovenian authorities last month.
Slovenia’s new measures in the package include a commitment for sale of NLB Bank with a first sale tranche of at least 50% plus one share by the year end.
By the end of 2019, the Slovenian government committed to cut down its stake in the bank to 25% plus one share.
In late January after a delay in the sale of a first tranche, the EC initiated a full-scale probe leading to the Slovenian authorities to offer the concession.
The EC said that if Slovenia does not stick to the foreseen deadlines, a divestiture trustee will be appointed to handle the sales process.
According to the EC, Slovenia prolonged important commitments while coming up with new commitments to compensate for the delayed sale and restructuring process of the NLB Bank.
The new commitment package also covers further compensatory measures, which will boost the viability of bank and help to put off undue distortions of competition in the Slovenian banking market, said the EC.
EC Commissioner, in charge of competition policy, Margrethe Vestager, said: “The sale of NLB was an important remaining milestone of NLB’s restructuring plan, which allowed us to approve over €2 billion of State aid to the bank in 2013.
“Therefore, I welcome Slovenia’s commitment to a clear time path to achieve this sale. Thanks to this, the Commission can today approve Slovenia’s new commitment package for NLB, ensuring that the bank will be a viable long-term player in the Slovenian banking market.”
NLB Bank, which is the largest banking company in Slovenia, had a balance sheet of €13bn as of end 2017 figure.
It has been offered €2.32bn in state aid by Slovenia in the past. As part of these, the Slovenian bank secured three State recapitalizations, that include €250m in March 2011, €383m in July 2012 and in December 2013, a third recapitalization of €1.56bn along with a transfer of impaired assets to a State-owned bad bank with an implied aid element of €130m.