Business News

NLB Boss Says June 2011 Last Date for Capital Injection

Bled, 17 September (STA) - The chairman of Slovenia's biggest bank, NLB, Bozo Jasovic has warned that the bank will need to carry out the long-awaited capital raising before June 2011 if it wants to avoid having to curb operations.

Jasovic stressed at Bled on Friday that the bank was looking to secure the fresh capital as soon as possible. "We'll do our best to ensure that there are no obstacles on our part," said Jasovic of the EUR 400m plan that is expected to be put up for a vote among shareholders in November.

He told reporters on the margins of a meeting of managers from SE Europe taking place at Bled that the fresh capital had to be secured in the first half of 2011 if the bank was to keep the current extent of operations.

Jasovic would not speculate what operations would be curbed should the fresh capital not be provided. "We need to draw up a very clear and sustainable plan," said Jasovic.

Being one of the main creditors of Merkur, the hardware retail and wholesale chain which declared insolvency on Thursday, Jasovic said that the NLB will now await the restructuring plan from the Merkur management before deciding on whether to settle on a conversion of its claims into an ownership stake.

He hopes that the plan will be put forward soon, so that the NLB can study it and decide on how to act.

Moreover, Jasovic said that he no longer expects the bank to break even by the end of this year, given that it finished the first half with a loss.

"When we drew up the plans for this year, we stated that our goal was a profit, but at the same time warned that there were downside risks. A protraction of the crisis and weakening of the profit means that these risks have become reality."

He said that the weak first quarter economically was increasing the need for provisions. "The results before provisions were better than the last year, but there has been a large need for provisions...which is why the bank is expected to finish with a loss."

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