Slovenia’s largest bank NLB sells €104mn NPL portfolio

By bne IntelliNews July 20, 2016

Slovenia’s largest state-owned lender Nova Ljubljanska Banka (NLB) said on July 19 that it has agreed to sell a package of retail non-performing loans (NPLs) with face value of approximately €104mn.

The Slovenian government hopes to privatise NLB, but first needs to sell off its portfolios of bad loans. This is the second NPL package put up for sale by NLB, which concluded an agreement on the sale of a €396mn package of corpoate loans at the end of June.

NLB said in a press release posted on the website of the Ljubljana Stock Exchange that by signing the agreement on selling the package of Slovenian retail NPLs, the bank has concluded the so-called package sale of a major portion of its NPL portfolio. The sale of the remaining part of its NPL portfolio will depend on the market situation.

Slovenian daily Dnevnik reported earlier this month that unofficially the package of non-performing claims to companies was purchased by US fund Pine River Capital, Swiss buyout fund DDM Group and the Czech APS Holding.

NLB Group, which includes NLB, increased its net profit to €91.9mn in 2015, up 47% compared to 2014, the company announced on March 7 in its latest annual unaudited financial report. NLB, with its stand-alone result of €43.9mn, contributed the most to the NLB Group's result.

The value of the group’s portfolio of NPLs was reduced from €2.62bn or 25.5% in 2014 to approximately €1.9bn or 19.3% in 2015.

Slovenian Sovereign Holding (SSH) announced on December 3 that NLB’s privatisation would be launched in 2016, but it expected NLB will be challenging to offload. NLB, which was nationalised in 2013, is the largest of around 20 companies SSH plans to sell off in 2016.

The bad loans ratio in Slovenia has maintained its downward trend since 2013, when the government stepped in to recapitalise several major banks burdened by bad loans, including NLB. The bad loans ratio fell to 9.9% at the end of 2015 from 11.9% at end-2014 and 13.4% at end-2013. The ratio stood at 8% in May, the same as in April, the Slovenian central bank Banka Slovenije said on July 12.

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