Slovenian NLB bank says meets EU capital norms

(LJUBLJANA) - Slovenia's largest bank NLB said Monday a state injection allowed it to successfully raise its capital ratio to meet the the European regulator's capital adequacy requirements.

NLB said its core tier one capital ratio had been raised to 9.0 percent required by the European Banking Authority.

Earlier on Monday, the European Commission approved for six months a 382.9 million euro ($494 million) capital injection into NLB by the Slovenian state so it could meet the capital adequacy ratio.

The Commission said the government's aid plan was "appropriate, necessary and proportionate" but warned it had "doubts that the plan adequately addresses the causes for NLB's distress or foresees Slovenian authorities plans to inject more capital into NLB."

At NLB's shareholders' meeting last week, the Slovenian state, which had a 55.6 percent of the bank, agreed to invest 320 million euros in contingent convertible bonds while KBC, the bank's second largest owner, would increase its stake to 33.9 percent from 25 percent.

But on Friday, KBC backed out of the deal and instead two Slovenian state-owned funds SOD and KAD agreed to invest over 60 million euros into NLB to shore up its finances.

The EBA required European banks to raise their capital to asset ratios to nine percent by the end of June to ensure they are able to weather losses.

The bank, which has been burdened by non-performing loans, reported net losses in 2011 of 239 million euros after suffering a loss of 202 million euros a year earlier.