Privatisation of Nova Ljubljanska Banka (NLB) bank, Slovenia’s largest state-owned lender, will be launched in 2016, Slovenian Sovereign Holding (SSH) announced on December 3.
NLB, which was nationalised in 2013, is the largest of around 20 companies SSH plans to sell off in 2016. The state holding company, which is managing the privatisation process, also hopes to complete the sales of Adria Airways, auto-components manufacturer Cimos and hygienic paper company Paloma.
However, SSH officials indicated that they expected NLB to be the most challenging company to offload. "Most of the energy and resources will in 2016 focus on activities related to the sales process system the largest Slovenian bank NLB, d. d.,” commented Anja Strojin Štampar, a member of SSH’s management board, according to the holding company’s statement.
The national asset management strategy is relatively restrictive, as it envisages privatisation of NLB by IPO, SSH chairman Marko Jazbec told a press conference in Ljubljana, Slovenian Press Agency (STA) reported. Under the strategy, the state should keep 25% plus one share in the bank, a SSH spokesperson confirmed to bne IntelliNews.
"We will try to agree with the government on an expansion of possible ways of sale," Jazbec said, adding that the timetable for the sale was "relatively tight".
The Slovenian government launched a €4.8bn bailout in 2013 when its largest banks were hit by the eurozone crisis, and the government is now looking to exit is holdings in the sector. NLB is due to be sold by the end of 2017 under an agreement between Slovenia and the European Commission.
In June, SSH agreed to sell NKBM, Slovenia's oldest and second largest bank, to US investment fund Apollo Management and the European Bank for Reconstruction and Development (EBRD). Rating agency Fitch commented on July 6 that the sale was a signal that stability is returning to the country’s troubled banking sector.
Meanwhile, Standard & Poors (S&P) has revised its credit rating for NLB from negative to stable, the bank announced in a December 3 filing with the Ljubljana Stock Exchange.
The rating agency affirmed NLB’s long- and short-term credit ratings at ‘BB-‘ and ‘B’ respectively.
According to S&P, the bank's credit risk is declining due to its restructuring, ongoing optimisation and the gradual economic recovery in Slovenia.
NLB said that according to the agency, the rating action followed the national introduction of a bank resolution framework and thus lowered the likelihood of extraordinary government support.