NKBM Confirms Planned Capital Injection

Date: 05/07/2008
Category: Latest news

Ljubljana, 07 May (STA) - Slovenia's second largest bank, NKBM, confirmed press reports about a planned capital injection in the amount of EUR 150m in Wednesday's press release, saying that the management would moot the proposal at the supervisory board session on 14 May.

In the announcement that confirms a report published in Wednesday's edition of daily Dnevnik, the bank says the aim behind the move is to ensure capital adequacy and further growth. Pending the announcement, the management of the Ljubljana Stock Exchange suspended trading in the NKBM share, which resumed just after 11 AM. According to the Dnevnik report, the NKBM supervisory board is to decide on 14 May whether to call a shareholders' meeting to take the decision on the capital injection. It is to be carried out following a model similar to the ongoing capital increase at NLB, Slovenia's No. 1 bank. In the first round the new shares are to be offered to all existing NKBM shareholders. The remaining shares are then to be offered to individuals in the second round, and to institutional investors in the third round, the Dnevnik report says. The paper notes that NKBM chairman Matjaz Kovacic has often indicated over the past few months that he would desire a capital injection whereby the state would reduce its current stake of 42% to 25% plus one share. Dnevnik comments that this looks unlikely, as the state (which holds a total of 51.6% of NKBM along with the state-run KAD and SOD funds) is planning to fully use its preemptive right to fresh shares. Quoting unnamed sources, the paper alleges the management and the owners of the bank are at odds over what the fresh capital should serve for. While the management would like to use it for expansion in the region, the government is said to be of the opinion that NKBM should consolidate internally as a group, which also includes postal bank Postna banka Slovenije and insurer Zavarovalnica Maribor.