Nova Ljubljanska Banka d.d. will get 381 million euros ($475 million) from its shareholders to strengthen the capital at Slovenia’s biggest bank.
The Slovenian government, which holds an indirect majority in NLB, will purchase 320 million euros of contingent convertible bonds, while KBC Groep NV, the second largest investor, will buy 61 million euros in shares, Mojca Strojan, the spokeswoman of the Ljubljana-based bank, said by telephone today.
NLB, which in 2011 reported a loss for a third consecutive year on surging bad loans, must improve its core Tier 1 capital ratio to meet the requirements of the European Banking Authority and the Slovenian central bank. The bank is relying on loans from the European Central Bank for liquidity because of limited access to wholesale funding.
Nova Ljubljanska took 1.2 billion euros of loans out of a total 2 billion euros taken by Slovenian lenders from the ECB, the country’s central bank said earlier this month.
The government plans to cut its NLB holding to 25 percent plus one share, which may happen by the end of the year, Finance Minister Janez Sustersic has said.