Maribor, 09 November (STA) - Slovenia's second largest bank, the majority state-owned NKBM, said Friday it would seek a capital increase at an extraordinary shareholders meeting in December to meet EU banking regulations requiring that its Core Tier 1 capital ratio achieves 9%.
The management proposes a EUR 50m issue of 38.4 million new shares at EUR 1.3 apiece that would nearly double the share capital to EUR 80.9m and almost double the number of shares. The pre-emptive right of majority shareholders would be excluded.
The convocation of the shareholders meeting follows a resolution of the AGM in June at which the management was told to make sure the bank's Core Tier 1 capital ratio reaches 9% by the end of the year.
The bank has put its majority stake in insurer Zavarovalnica Triglav for sale and it appears it may earn between 60 and 70 million euros with the sale, but that will not be enough to push it over the threshold.
The bank therefore asked major shareholders on the likelihood of their participation in a capital increase, but the majority "expressed a negative opinion", leading to the decision to exclude their pre-emptive right, according to Friday's press release.
The shareholders will also be asked to authorise the management for recapitalisations of up to EUR 120.4m in the next five years, but that would be used exclusively for new shares earmarked for the swap of hybrid debt that the bank plans to issue in December.
NKBM, incurred a net loss of EUR 100.3m in the first nine months of the year, which compares to EUR 4.4m in net loss in the same period of 2011, largely due to provisions and impairments stemming from credit risks.
Operating profit before provisions and write-downs stood at EUR 30.4m, while it topped EUR 63.7m in the same period last year.
NKBM is in majority ownership of the state, which holds a direct 27.8% stake, and a handful of state-owned companies and funds.