Nova Kreditna Banka Maribor d.d. received 182 million euros ($237 million) of fresh funding that will improve the capital ratio at Slovenia’s second-biggest bank by assets.
The Slovenian government, which indirectly owns a majority of the lender, is providing a 100 million-euro hybrid loan with a fixed annual interest rate of 10 percent, the Finance Ministry in the capital Ljubljana said in an e-mailed statement. The bank also sold insurer Zavarovalnica Maribor d.d. last year for 65 million euros and repurchased hybrid bonds at a discount, the Maribor-based lender said in a separate statement.
“With these moves, the bank is meeting the requirements of the European Banking Authority and the Slovenian central bank to strengthen its capital position,” Nova Kreditna said in the regulatory statement.
Slovenian banks, including Nova Ljubljanska Banka d.d. that relied on funding from the European Central Bank, are seeking fresh capital that is being depleted by surging bad loans as the export-driven economy enters its second recession in three years. Lenders in the euro-region nation were at the center of investors’ concern Slovenia may be forced to seek international aid to prop up its financial industry.
That fear has receded after the Constitutional court prevented a referendum on the so-called bad bank plan that is meant to clean lenders’ balance sheets as well as a vote on the creation of a wealth fund that should ease the sale of state assets, including Nova Kreditna.
After the capital boost, the core Tier 1 capital ratio will rise above the mandated 9 percent, the bank said today.
Nova Kreditna rose the most in two weeks in Ljubljana, gaining 0.053 euro cents, or 4.4 percent, to close at 1.27 euros in Ljubljana. That gives the bank a market value of 50 million euros after the company lost 60 percent of its value from a year ago.