Sept. 14 (Bloomberg) -- Nova Ljubljanska Banka d.d. named Janko Medja as chief executive officer of Slovenia’s biggest bank, which is struggling with increased bad loans as the economy slides into recession.
Medja has been a member of the supervisory board of the Ljubljana-based bank since June, board member Stephan Wilcke told reporters today. Before joining NLB, Medja was responsible for corporate banking at UniCredit SpA’s unit in Slovenia. He replaces Bozo Jasovic, who stepped down in December because of a failed attempt to sell the holding in Mercator Poslovni Sistem d.d. to its Croatian rival Agrokor d.d.
“I am taking this job at a very difficult time for the bank,” Medja told reporters in Ljubljana after the appointment. “The main priority will be to restructure the portfolio of bad liabilities in cooperation with other agencies, where the government and its institutions as well as the European Union will play an important role. ”
Nova Ljubljanska, majority owned by the government, is weighed down by bad loans as the export-driven economy enters its second recession in three years. NLB has lent a total 209 billion euros ($2.74 billion) that will probably never be repaid, private broadcaster POP TV reported on Sept. 6, citing a leaked report by the country’s central bank.
Slovenia will guarantee as much as 4 billion euros to help recapitalize its banking industry, which is relying on loans from the European Central Bank for liquidity, Finance Minister Janez Sustersic said yesterday.
Lenders in the nation that adopted the euro in 2007 are lending less to the economy as they increase provisions for bad loans, the government’s economic institute has said. Bad loans advanced to more than 6 billion euros at Slovenian banks at the end of April, the institute said in July.
Gross domestic product shrank an annual 3.2 percent in the second quarter and is estimated to contract 2 percent for the whole year, according to the Organization for Economic Cooperation and Development.
KBC Groep NV of Belgium is the second-largest investor in NLB after the government.
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