The Slovenian stock exchange halted share trading in Nova Kreditna Banka Maribor d.d. and Abanka Vipa d.d. as the deadline looms for the outcome of stress tests that will show if Slovenia can avert a bailout.
The bourse also stopped trading of some subordinated debts of unlisted Nova Ljubljanska Banka d.d., Banka Celje d.d., Nova Kreditna and Factor Banka d.d. and Probanka d.d., the Ljubljana stock exchange said in a statement on its website today. Shares of Nova Kreditna slumped 31 percent on Nov. 29 when it said the nine-month net loss narrowed to 67 million euros ($90 million) from 97.6 million euros from a year earlier. Factor Banka and Probanka are in the process of controlled liquidation.
“Not all conditions for fair, orderly and efficient trading in the above-mentioned securities are satisfied,” the bourse said. “Key information which would enable an average investor to make informed investment decisions regarding the above listed securities has not been provided.”
Investors are awaiting stress test results of the Slovenian bank system and an asset-quality review due Dec. 13 that will reveal how much cash the government of Prime Minister Alenka Bratusek needs to provide for their repair and aid an economic recovery. The Adriatic nation has about a 5 billion-euro cash buffer for banks, Bratusek has said, while Fitch Ratings estimates the amount could be as high as 4.6 billion euros.
The halt will last until further notice or “until there is more clarity” about the banks “because there is a lot of media speculation and we have to treat all investors equally,” Andrej Sketa, president of the bourse management board, said over the phone today.
The yield on dollar-denominated notes maturing in 2022 declined two basis points from the previous session, close to the lowest level in six months, after Slovenia sold 1.5 billion euros of debt that analysts including Abbas Ameli-Renani from Royal Bank of Scotland Group in London said reduced the risk of an outside intervention.
The yield on the bonds was at 5.67 percent at 11:35 a.m. in Ljubljana, according to data compiled by Bloomberg.
“It’s still not clear whether the government would directly inject capital into banks or it would eventually go for an European Stability Mechanism bailout,” analysts at Hypo Alpe-Adria Bank in Zagreb, Croatia, including Hrvoje Stojic, said in a report today. They said Slovenian bonds will trade “volatile in the near term.”
Slovenia has delayed the bank rescue by six months after the European Commission ordered an outside assessment of the nation’s bank industry that are now due Dec. 13, according to central bank Governor Bostjan Jazbec.
The government will “immediately” boost capital at banks such as Nova Ljubljanska after the results are released, it said Nov. 27, when it raised its estimated for the bank fix at 1.4 billion euros. NLB, Nova Kreditna and Abanka dominate a lending market burdened by bad debt equal to about a fifth of Slovenia’s annual economic output.
Slovenia would be able to handle the bank rescue cost if it doesn’t exceed 2.5 billion euros, Carlos Ortiz, an economist at UniCredit Bank AG in London, said in a Nov. 5 report. Ameli-Renani from RBS estimated the sum may be about 3 billion euros.
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