Ljubljana related

06 Jan 2021, 12:06 PM

STA, 5 January 2020 - NLB, the largest bank in Slovenia, will phase in fees for combined deposits by physical persons of over EUR 250,000 as of April. The monthly fee will amount to 0.04% and will be first charged in May, the bank said in a press release on Tuesday.

The bank will add up the amounts on personal accounts and other accounts, including deposits, held by individuals in NLB, and charge the fee if the combined amount in a certain month exceeds EUR 250,000.

This means that if a client holds EUR 50,000 above the EUR 250,000 threshold for an entire month, he or she will pay a EUR 20 fee, the bank said.

The fee is expected to affect a small number of clients at NLB - some 100 from the network and slightly more from private banking. According to the business newspaper Finance, around 300 clients are expected to pay the fee.

The fee has been recently announced by NLB management board chairman Blaž Brodnjak, who has told the newspaper Delo that deposit fees had already been introduced in the majority of eurozone countries, most of which opted for the EUR 100,000 threshold.

"Fact is that the loan-to-deposit ratio in Slovenia is very unfavourable and deteriorating fast. This means that the volume of deposits compared to loans is higher than in comparable countries," Brodnjak has said.

Due to the lockdown and extensive stimulus measures, deposits have been rising even faster since people have nowhere to spend the money. Household bank deposits have thus already reached EUR 22 billion.

04 Sep 2020, 11:04 AM

STA, 3 September 2020 - By seizing European Central Bank (ECB) documents from the Slovenian central bank in an investigation of the 2013 bank bailout, Slovenia breached provisions of EU law that grant the ECB special immunity, an advocate general at the Court of Justice of the EU said in her opinion in a case brought against Slovenia by the EU Commission.

Advocate General Juliane Kokott said that by seizing communication and electronic documents from the premises of Banka Slovenije in 2016 without first coordinating with the ECB and securing a court decision, Slovenian law enforcement breached Articles 2, 18 and 22 of Protocol No. 7 on the Privileges and Immunities of the European Union.

After it seized the documents, Slovenia neither substantiated which documents are necessary for the national criminal procedure nor returned the remaining documents which constitute protected archives of the ECB, reads the opinion, which was presented at the court on Thursday.

The 21-page opinion, which is not binding on the court, thus upholds both claims made by the European Commission in the lawsuit against Slovenia.

Summing up the gist of the opinion, Advocate General of the European Court of Justice Gerard Hogan said that the court must now "resolve the tension" between the Union's interest in preserving the ECB's independence and the interest of member states to conduct effective criminal investigations.

The procedure is seen as an important precedent in that it raises important questions about the relationship between national authorities and EU institutions.

The protocol on privileges and immunities is rarely the subject of a legal dispute and the case could help clarify the circumstances under which immunity of Union archives applies. However, it remains unclear whether the court will deliver a final judgement at all.

Slovenia has so far rejected all allegations and a Slovenian legal representative said after oral arguments in June that the court's questions had indicated a favourable disposition towards Slovenia's arguments.

But just days before that, Prime Minister Janez Janša wrote a letter to European Commission President Ursula von der Leyen inquiring about the conditions under which the Commission would be willing to withdraw its lawsuit.

In July Janša clarified that an agreement on withdrawal might involve ECB representatives coming to Slovenia and making it clear which of the seized materials constitute ECB archives. Slovenian law enforcement would have to agree on that.

The court says it does not have information about a possible withdrawal of the suit. Unofficial information from the Slovenian side indicates there have been no new developments in this respect. The lawsuit may be withdrawn at any point before the court hands down its ruling.

Commenting on the advocate general's opinion, Slovenian Justice Minister Lilijana Kozlovič said the opinion constituted "neither victory nor defeat since the case is a precedent".

"Regardless of the outcome, we will finally know what constitutes ECB archives, which has so far not been entirely clear," said the minister, noting that she could not comment in greater detail since the ministry had not yet received the opinion.

Asked whether Janša had been unsuccessful with regard to the possibility of a withdrawal of the lawsuit, Kozlovič said the court procedure was running independently while parties to the proceedings had other legal avenues at their disposal as well.

The Slovenian central bank would not comment, saying it was not a party to the proceedings. The Supreme State Prosecutor's Office would not comment at this point in the proceedings.

Janša meanwhile said on Twitter that the "abuse of the police directed by the [Social Democrats] SD party in the clash with [Banka Slovenije] Governor Jazbec has not worked out". He added that such abuses always shed bad light on the country.

The European Commission, on the other hand, expressed satisfaction with the advocate general's position.

"This follows the Commission's decision to refer Slovenia to the Court of Justice of the EU for the violation of the inviolability of the archives of the Union and the duty of sincere cooperation in the context of the seizure of ECB documents that took place at the Central Bank of Slovenia," the Commission said.

06 Aug 2020, 13:07 PM

STA, 6 August 2020 - The Slovenian subsidiary of the Italian banking group Unicredit saw its consolidated profit plunge to EUR 1 million in the first half of 2020 compared to EUR 16 million in the same period last year.

Pre-tax profit for Unicredit Banka Slovenija and its leasing arm Unicredit Leasing in the first half was meanwhile down by 94.8%, from EUR 20 million to EUR 1 million, shows a report released on Thursday.

Net operating profit decreased 83.6% to EUR 4 million, and operating profit was down from 19 million to 11 million (-41.9%).

While operating revenue was down almost 22% to EUR 33 million, operating costs were down only 5.1% to EUR 21 million, with payroll costs decreasing by 4% to EUR 12 million.

Net interest revenue was up slightly to EUR 23 million, but net fees and commissions were down by 15.3% to EUR 11 million.

The bank saw a 2.2% drop in customers loans in the first half of the year to EUR 1.9 billion, while deposits by customers were up by 3.7% to EUR 2.08 billion.

26 May 2020, 14:01 PM

STA, 25 May 2020 - The NLB bank will carry on with optimising its business network by closing ten offices across Slovenia on 15 June. The Mislinja municipality in northern Slovenia, one of the places that will experience the closure first-hand, has protested against the step.

The bank has been citing changed clients' habits and the rise of online and mobile banking as reasons for closing physical offices. During the coronavirus epidemic, digital banking services became even more popular.

NLB believes that such habits will have a long-term impact on bank visits, with people being less likely to frequent the actual offices.

The bank has already started notifying the clients as well as local communities of the step, NLB has told the STA, adding that other offices will step in if needed or a team of mobile bankers will conduct home visits.

Moreover, a NLB mobile office will keep paying visits across the country until the end of the year. The bank also highlighted that its ATMs will remain in places where the offices will be shut down.

The Mislinja community is strongly opposing the closure since the NLB office is the only bank office in the municipality. The locals are up in arms, Mislinja Mayor Bojan Borovnik told the STA, pointing out that the elderly required the vicinity of the office in particular.

Borovnik hopes that the bank's decision is not final. He is also looking into the possibility of another bank opening up an office there.

The Mislinja office was temporarily closed during the epidemic. The bank recently notified the municipality of its permanent closure.

The Koroška regional council has addressed a letter to the bank, protesting over the move and urging NLB not only to keep the office open but also to reopen a couple of offices in northern Slovenia.

Meanwhile, today the bank reopened twelve offices across Slovenia in the wake of a major easing of coronavirus restrictions.

15 May 2020, 13:08 PM

STA, 14 May 2020 - NLB generated EUR 18.3 million in net profit at group level in the first quarter, a 68% year-on-year decrease that Slovenia's largest bank said was the result of credit impairments and provisions formed due to the coronavirus epidemic.

Net interest income decreased by 3% to EUR 77.4 million, "mainly due to higher interest expenses resulting from new Tier 2 instruments issued by the bank, which was partly compensated for by increased loan volumes", says NLB's business report published on Thursday.

Net fee and commission income increased 6% to EUR 42.4 million, in particular in the retail segment in banking members on the markets of SE Europe. In the second half of March, net fee and commission income dropped due to the outbreak of Covid-19, especially in card operations, the bank said.

In the first quarter the NLB Group set aside impairments and provisions totalling EUR 28.3 million, which compares to EUR 0.6 million in the same period last year. Additional credit impairments and provisions in the amount of EUR 24.5 million were recognized in the first quarter due to the outbreak of Covid-19.

Gross loans to customers amounted to EUR 8.13 billion, which is 2% more than at the end of last year. Deposits from customers increased moderately, the bank said.

Gross loan to households remained level while gross loans to companies increased by 5% compared to the end of 2019. Lending restrictions introduced by Banka Slovenije in November 2019 and the coronavirus outbreak reduced new loans to households while demand increased for working capital at companies, NLB said.

The bank said it holds a very strong liquidity position, at the group and individual subsidiary bank level. The total capital ratio for the group stood at 18.5%, which "represents a solid basis to cover all regulatory requirements... also in the aggravated circumstances during COVID-19 pandemic".

Credit portfolio quality did not deteriorate, with the share of non-performing loans remaining unchanged at 2.7%. The group "expects credit portfolio quality to worsen in 2020 through a downgrade of some clients, including the increase of non-performing loans as a result of the economic slowdown".

While the supervisory board also got acquainted with the results today, chairman Blaž Brodnjak assessed the crisis could also mean an opportunity.

"On the one hand, us being the largest banking and financial group headquartered in this region - the group which calls this region its home - means that people listen to us. And on the other hand, it might just give us an additional push towards making full use of our potential," said Brodnjak.

23 Mar 2020, 09:16 AM

STA, 18 March 2020 - The Italian owners of the Slovenian subsidiary of the banking group Unicredit confirmed on Wednesday the allocation of EUR 22.8 million out of EUR 45.1 million in last year's distributable profit for dividends, meaning EUR 4.67 gross per share. The remainder will remain undistributed.

The Unicredit shareholders were also notified of the supervisory board changes - the term of five supervisors is to expire on 4 April, Pasquale Giamboi and Andrea Cesaroni will remain on the board for another term, while other three supervisors will be replaced by Enrica Rimoldi, Giorgiana Lazar O'Callaghan and Fabio Fornarolli.

Unicredit Slovenia also endorsed a multi-annual development plan for the period up to 2023 at today's meeting.

Last year, Unicredit Banka Slovenija and Unicredit Leasing generated EUR 79 million in operating revenue, a 0.5% increase year-on-year. Meanwhile, net interest revenue dropped by 8.2% to EUR 46 million compared to 2018.

The Italian banking group Unicredit generated EUR 3.4 billion in net profit, down almost 18% year-on-year. The group's revenue saw a downturn as well, with the management attributing poorer business results mostly to a drop in net interest revenue.

11 Mar 2020, 10:01 AM

STA, 10 March 2020 - The Constitutional Court has stayed the implementation of an act providing easier access to recourse for roughly 100,000 investors who lost their investments during the banking sector bailout of 2013. The court announced this on Tuesday, two months after the central bank challenged the legislation.

Banka Slovenije said in January that "the most controversial parts of the law affect monetary financing and the financial independence of the central bank".

The act makes Banka Slovenije financially liable for lawsuits from wiped-out investors and mandates it to set aside reserves for damage payments that most estimates suggest could approach a billion euro.

While the legislation is stayed, limitation periods have also been suspended for damage claims as set down in the banking act and for the filing of lawsuits, the Constitutional Court said.

Moreover, Banka Slovenije and the Maribor District Court must remove from their websites posts required by the law on judicial protection procedure for former holders of eligible liabilities of banks.

The data room manager, the Maribor District Court and the Securities Market Agency must suspend all data processing except data storage and must also prevent access to the data.

The Constitutional Court also ordered suspension of all civil law procedures filed under this law and said in the press release that the decision to stay the legislation was unanimous and that the case was a priority.

The court said it decided to stay the act in its entirety because its provisions were very closely interlinked. Constitutional Court judges believe there could be a number of hard-to-mitigate consequences.

Among other things the documents in the virtual reading room could be confidential or contain business secrets, whereas the act allows access to a potentially large group of people.

Some hard-to-mitigate consequences could be related to efforts and expenses of clients and with organisational issues of the Maribor District Court, the only competent court for these cases.

Meanwhile, the Finance Ministry said that it was still examining the decision of the Constitutional Court, while the central bank reiterated its case in a statement.

The Association of Small Shareholders again urged the government and the National Assembly to reconsider a compensation scheme or out-of-court settlements. The compensations scheme would resolve immediately resolve the problems of most small shareholders.

The law on judicial protection procedure for former holders of eligible liabilities of banks was passed in late-2019 after the Constitutional Court said in 2016 that a provision of the law on banking did not give the subordinated creditors and shareholders effective access to recourse.

The 2013 bail-in was managed by Banka Slovenije in conjunction with the government, the European Commission and the European Central Bank (ECB). It resulted in the erasure of roughly EUR 600 million of subordinated bank bonds and shares in several banks held by roughly 100,000 shareholders, which had by then been almost worthless.

28 Feb 2020, 10:12 AM

STA, 26 February 2020 - The Slovenian NLB bank announced on Wednesday it had signed an agreement with the Serbian government to acquire the 83% state stake in the bank Komercijalna Banka. The deal worth EUR 387 million is pending regulatory approval and is expected to be finalised in the last quarter of the year.

Announcing the deal signed today between the NLB management and the Serbian government, the bank said the conclusion of the transaction was pending approvals from several institutions, including the European Central Bank and the countries' central banks.

According to the NLB, the purchase price for the 83.23% stake in Komercijalna Banka is EUR 387 million, which will be payable in cash on completion.

The Slovenian market leader added that, in accordance with the Serbian bank privatisation regulations, it was not required to launch a mandatory tender offer for the rest of the shares in the Serbian bank.

The purchase price implies a valuation of EUR 465 million for 100% of Komercijalna Banka's ordinary share capital.

It will be subject to a 2% annual interest rate between 1 January 2020 and closing, with NLB benefiting from the bank's earnings during that period.

Subject to approval of the Serbian central bank, the existing shareholders of Komercijalna Banka will receive a dividend equating to 50% of 2019 net profit up to a maximum of EUR 38 million before closing.

As a result of the transaction, NLB's market share in Serbia will increase to over 12.1% by total assets, making it the third largest banking group in the country, the Slovenian bank added.

"NLB's operations in Serbia will be by far the largest outside of Slovenia," commented Blaž Brodnjak, the CEO of the bank which already operates the NLB Banka Beograd subsidiary.

The Serbian subsidiary, which has 28 offices and which had total assets of EUR 614 million and posted EUR 4.1 million in net profit last year, posted a 29% growth in net loans to customers in 2019, the biggest in the group.

According to the Serbian media, Komercijalna Banka has EUR 3.5 billion in total assets, and last year posted EUR 74 million in profit. The bank has 2,744 employees and 200 offices in Serbia, Montenegro and Bosnia-Herzegovina.

27 Feb 2020, 09:58 AM

STA, 25 February 2020 - The Bank Association has observed a "marked fall" in freshly approved retail loans in the months following the central bank's brake on lending to households, both for consumer and housing loans.

"In the field of consumer loans, the situation has resulted in net repayments - a nominal decline - which increased further in December," the association said on Tuesday.

Data that 13 banks submitted to the association show the number of newly approved consumer loans reduced from 10,816 in September and 13,484 in October to 5,566 in November, 5,009 in December and 6,277 in January.

40% Fall in Housing Loans, 60% in Consumer Loans, After Slovenia Tightened Credit Rules

The number of housing loans dropped from 1,154 in September, 1,701 in October, 1,160 in November, 984 in December and 1,019 in January.

The association did not offer year-on-year comparisons which would eliminate seasonal changes in trends.

The central bank has recently assessed that the implementation of its decision on macro-prudential restrictions on retail lending has partly affected lending trends.

However, Banka Slovenije also said it would be premature to draw any conclusions on the effects of the measure because it was necessary to take into consideration non-typical conduct by banks and borrowers in anticipation of the measure, and after its implementation, delays in loan drawing and the effect of holidays and season.

Central bank data show that housing loans increased by EUR 105 million and consumer loans rose by EUR 14 million in the final quarter of 2019, which compares to EUR 64 million and EUR 69 million, respectively in 2018.

Year-on-year growth in housing loans stayed at 5.8% in December, while the net monthly growth in those loans, at EUR 23 million, was lower than the average for 2019, at EUR 29 million.

Bank Calls for Review of New Loan Restrictions After Dramatic Fall in Mortgages, Consumer Lending

The growth in consumer loans, at an average rate of 11.7% in 2019, slowed down to 8.9% year-on-year in December following the central bank's restrictions on consumer lending.

An increase in the volume of consumer loans in October was followed by a decrease in November and December by EUR 15 million and EUR 21 million, respectively, the central bank said.

Banka Slovenije imposed lending restrictions to curb excessive consumer lending and cut loan maturity. It expects the lending level to be stabilised to better match other economic parameters and that consumer loans will be directed with respect to their purpose into housing loans even though they are less profitable for banks.

24 Feb 2020, 14:45 PM

STA, 21 February 2020 - Slovenian banks generated a combined pre-tax profit of EUR 597.4 million last year, which the central bank says is the highest pre-tax profit on record. The figure is up 12.5% from the year before.

Profit after tax rose by 8% last year to EUR 534.9 million, while the banks increased their total assets by 6.3% to EUR 41.2 billion, the latest report by the central bank shows.

Net interest revenue rose by 1.6% to EUR 682.7 million and non-interest revenue increased by 19.1% to EUR 573.4 million.

The banks' bottom line was positively affected by net release of impairments and provisions. The pre-tax return on equity was 12.3%. Costs rose by 5.6% to EUR 706.8 million.

The growth in lending to the non-banking sector slowed down in December to 5.8% year-on-year, mainly because of a slowdown in corporate loans.

"The volume of loans to companies decreased by EUR 262 million in December, the most since 2016, and is partly attributable to the maturity of major loans agreed mid-last year," Banka Slovenije said.

Year-on-year growth in housing loans stayed at 5.8% in December. "After two distinctively above-average months the net monthly growth in those loans, at EUR 23 million, was lower than the average for 2019, at EUR 29 million."

The growth in consumer loans, at an average rate of 11.7% in 2019, slowed down to 8.9% year-on-year in December following the central bank's restrictions on consumer lending.

"An increase in the volume of consumer loans in October was followed by a decrease in November and December by EUR 15 million and EUR 21 million, respectively," says the report.

In the last quarter of the year, housing loans increased by EUR 105 million and consumer loans rose by EUR 14 million, which compares to EUR 64 million and EUR 69 million, respectively in 2018.

"We assess that the changed trends in retail lending were partly affected by the implementation of the decision on macro-prudential restrictions on retail lending in November," said the central bank.

However, it added that it was premature to draw any conclusions on the effects of the measure, because it was necessary to take into consideration non-typical conduct by banks and borrowers in anticipation of the measure, and after its implementation, delays in loan drawing and the effect of holidays and season.

Banks also continued to reduce exposure to non-performing loans last year; these decreased by EUR 128 million in December to one billion euro, and their proportion in total exposure to 2.2%.

The non-banking sector's deposits in 2019 increased by 7.2%, the annual growth since 2014. In December, household loans increased by 8.7% year-on-year, which compares to 11-month average 7.5%

The growth in corporate deposits have been slowing down since mid-2018; in December it decreased by 0.4% year-on-year.

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