It is not possible to launch the privatisation of Slovenia’s largest lender Nova Ljubljanska Banka (NLB) under the current circumstances, the finance ministry said in a statement. 

Slovenia had committed to sell 75% of the bank by the end of 2017 in a restructuring plan that served as a basis for the European Commission's approval of state aid to the bank in the 2013 bailout. However, plans for an IPO were dropped in June amid a dispute over the pricing of the offer and an ongoing lawsuit over Yugoslav-era deposits in Croatia.

After Finance Minister Mateja Vranicar Erman discussed the issue with European Commissioner for Competition Margrethe Vestager on November 10, the ministry said that despite favourable market conditions the risk of transferred foreign currency deposits in Croatia raised by the ongoing legal dispute mean it is not possible to optimise the repayment of taxpayer money invested in the bank's rehabilitation. 

Previously, on October 26, the European Commission rejected the Slovenian government’s proposal to extend the deadline for the NLB privatisation by up to three years.

According to the ministry’s November 10 statement, Erman proposed changing the alternative sales commitment, which envisages contributions from the bank to a fund of funds. The ministry said this represented a “constructive solution that would help to ensure competitive conditions on the market, as well as to manage the issue of economic imbalances, since it could guarantee the development of medium and small enterprises”.

Croatia’s Privredna Banka Zagreb (PBZ) has sued the now-defunct Ljubljanska banka (LB) and its legal successor NLB over savings deposits from the Yugoslav-era, and the case is still being considered in Zagreb. These deposits were repaid to Croatian savers by the Croatian state, which then authorised Croatian commercial banks to recover them in court. The liabilities are estimated at €350mn to €400mn.