Slovenia Seen Passing Bank Stability Plan, Finance Minister Says

Slovenian lawmakers will probably adopt legislation to stabilize the euro region nation’s banking industry as it struggles with a surge in bad loans, Finance Minister Janez Sustersic said.

“I expect the legislation to be adopted and I think it’s urgent we do so,” Sustersic told reporters in Ljubljana today. A possible delay in adopting the plan “would be time lost,” Sustersic said today at the Finance Committee meeting in parliament in the capital Ljubljana, according to state-owned STA newswire.

Central bank Governor Marko Kranjec said at the same meeting that Slovenia shouldn’t rush with the legislation to create a so called bad bank, STA reported. Lawmakers will vote on the recapitalization plan tomorrow, part of an overhaul effort the government of Prime Minister Janez Jansa is working on to avoid seeking an international bailout package.

The government will guarantee as much as 4 billion euros ($5.2 billion) for the agency that will manage lenders’ bad assets and inject as much as 1 billion euros into ailing banks like Nova Ljubljanska Banka d.d. and Nova Kreditna Banka (KBMR) Maribor d.d., Sustersic has said.

Bad loans at Slovenian banks amount to 6 billion euros, Sustersic said today, according to STA newswire.

To contact the reporter on this story: Boris Cerni in Ljubljana at bcerni@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net