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.
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.
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.
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.
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.
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.
STA, 21 January 2020 - Bank NLB has asked the Constitutional Court to review tighter restrictions on lending imposed by the central bank in November. After filing the request on Tuesday, the bank expressed belief that its request would be a matter of priority for the court because of the "radical effect" the measures had on the quality of Slovenians' lives.
The bank believes that the measures were introduced too hastily and were too radical, and that they have to be abolished. Any anomalies detected in "individual market players" should instead be addressed with targeted and not systemic measures.
NLB says Banka Slovenije imposed the measures virtually overnight and triggered "an excessive drop in volume of loans and accessibility of loans by Slovenians within the strictly regulated and controlled system of commercial and savings banks, whereas there are no restrictions imposed on more expensive and more risky third loan providers".
The bank argues that the measures have already produced a radical effect with virtually total stop in growth in loan volume. What is more, the number of loans given out in the recent months has dropped dramatically.
The restrictions were introduced to protect the taxpayer, says the bank, adding, however, that Slovenian population is already among the least indebted in relevant global comparisons, while banks are highly liquid, which means that they are capable of absorbing any potential major shocks.
Moreover, Slovenia has the fresh experience of an extremely tough crisis, but in the 2009-2015 period there was no excessive increase in default among the population, the bank said.
Saying the measures were introduced overnight, the bank says the "legal unpredictability" makes it extremely hard to make business plans and evaluate companies.
The move by NLB comes a day after the Bank Association released data showing that the number of consumer loans had dropped by 60% compared to October and housing loans by 40%.
STA, 27 November 2019 - Abanka, Slovenia's third largest bank which was privatised in June, generated a net profit of EUR 42.5 million in the first nine months of 2019, a 20% year-on-year decrease. In the low interest rate environment, net interest income totalled EUR 45 million, which is on a par with last year's nine-month result.
Net interest income edged up 0.3% and interest income increased by 1.0%, while interest expenses grew by 7.3% or EUR 0.4 million nominally, show the business results released on Wednesday.
Net fee and commission income for the bank, which has been sold to the US fund Apollo, amounted to EUR 30.3 million, while operating expenses amounted to EUR 50.4 million.
On 30 September 2019, Abanka's total assets amounted to EUR 3,769.8 million, while its market share in terms of total assets stood at 9.3%.
"The bank has high liquidity and a strong capital base," the report says. On the reporting date, Abanka's total capital ratio stood at 23.5%.
Loans to non-bank customers totalled EUR 2.03 million at the end of September, up 4.7% or EUR 91.1 million compared to the end of 2018.
Loans increased as a result of loans to corporate customers and sole proprietors rising by 4.4% or EUR 46.3 million and those to retail customers by 4.1% or EUR 36.8 million, the bank wrote.
Deposits from non-bank customers amounted to EUR 3.02 million, an increase of 2.9% or EUR 85.9 million. Deposits from retail customers increased by 4.6% or EUR 95.6 million nominally and deposits from corporate customers and sole proprietors went down by 1.1% or EUR 9.7 million.
The Abanka group continued to actively reduce non-performing loans. These decreased by EUR 25.8 million, while the share of non-performing loans was down 1.0 percentage point to 3.6%.
Net impairment and provisions cancelled amounted to EUR 14.9 million, while in the same period of 2018 the figure stood at EUR 15.6 million. In the reporting period, the bank cancelled provisions amounting to EUR 11.1 million and impairment of EUR 3.8 million.
"The bank will continue with the optimisation of its operations, the accelerated development of digital channels and the digital work environment, while ensuring safe, stable and profitable operations," the report says.
Abanka, one of the banks bailed out in 2013 and 2014, was sold in June by the state to the Maribor-based NKBM bank, which had also been in state ownership before being sold to Apollo. The transaction, which entails the merger of the second and third largest banks in the country, is expected to be completed by the end of the year.
STA, 4 November 2019 - The parliamentary inquiry into suspected abuse of office at the bad bank interviewed on Monday the former chairmen of NLB and NKBM, Janko Medja and Aleš Hauc, who said that the banks had no power in determining which assets will and which will not be transferred to the bad bank as part of the 2013 bailout.
First to be interviewed was Medja, who said the bank was only an "object" and could not participate in determining the methodology for appraising assets, nor had it final say about which assets and why would be transferred to the bad bank.
He was faced with the questions from the inquiry chair, Jernej Vrtovec of the opposition New Slovenia (NSi), about the Bank Assets Management Company (BAMC) using "double standards".
Vrtovec noted that the BAMC made different assessments when placing a company or group on the list for transfer of assets, taking the DZS group as an example, as it had been transferred on the bad bank, while KD Group, which is also a financial holding, was not.
Medja, who was the chairman of NLB between the autumn of 2012 and February 2016, which included the state-sponsored bank bailout, said he could not answer the question as he did not remember concrete cases.
Regarding alleged pressures, he said that representatives of certain companies did ask the bank about the transfer, but NLB's answer was always that it stuck to the rules and procedures in line with the law.
According to Medja, the first list of claims to be transferred to BAMC was compiled by NLB, and was sent to an inter-ministerial task force and the Banka Slovenije central bank, with the two coming up with the final list.
Banka Slovenije had data on claims to individual companies from other banks, he said, adding that he could not tell why some claims or assets had not been transferred, as he did not have access to all documents.
According to Medja, the bank did not agree with certain results of asset quality reviews (AQR) regarding for how much claims could be sold. Due to the large quantity of data and relatively short time, he allows for the possibility that not all appraisals were compliant with the international accounting standards, in particular in real estate.
In individual cases, the bank's assessments did not comply with the AQR results, but the eventual estimates on the amount of the required capital were at a similar level, he added.
Medja explained the difference in the initial estimate about how much capital NLB needs and the final calculations with the fact that not the entire portfolio was reviewed in the first estimate.
Surprising things were discovered mainly in investments in foreign countries, he said, adding that NLB services were adopting in 2013 the recommendations of the European Banking Authority (EBA), which were becoming stricter.
Medja stressed on several occasions that when it comes to the bailout measures, NLB was an "object", adding that the bank's management had wanted to get a clearer picture and get a greater role in talks, "but had no chance to discuss it".
The bank could not risk capital inadequacy, and could not get capital on the market, he said, adding that the state-sponsored measures were an "all or nothing" approach, with the bank not being able to pick recapitalisation or transfer or bad claims to the bad bank alone.
"We could only pick recapitalisation as it was envisaged, or capital inadequacy, risking to lose the trust of deposit holders," he concluded.
Also interviewed was Hauc, who managed NKBM from March 2012 to February 2015. He too said that the bank had no say about which assets would be eventually transferred to BAMC, and repeated some of the other explanations offered by Medja.
He said that the the stress tests in 2013 had been "too brutal" and the AQR strongly underestimated the value of insurance of claims. Banka Slovenije was warned about this, but the bank had no influence whatsoever, he added.
Hauc noted that NKBM had wanted that all non-performing assets be transferred to the bad bank, with many of them staying in the bank after the bailout. "There is no logic in carrying out a bailout without transferring everything that is disputable to BAMC."
He also assessed that Banka Slovenije had been rather limited and that the European Commission had the main say, in fact its "lower-ranked officials", who had been sending e-mails about what needed to be done. "The bank had to implement the measures, otherwise it would go bankrupt."
Regarding the estimate of the amount the banks needed in the bailout, Hauc said that no damage had been done. "The state put the money from one pocket to the other. Even if too much money was given, it has not been lost."
He assessed that a majority of bad loans were a consequence of the crisis, and to lesser degree of bad practices. "Companies were borrowing excessively and then stumbled, while banks were not conservative enough in approving loans."
According to him, the US fund Apollo and the EBRD, which acquired NKBM in 2016 for EUR 250 million, got the bank for cheap but are doing a good job. "Apparently a bank had to be sold to show that we are a serious country, not a banana republic," Hauc concluded.
On the other hand, Janez Fabijan of Banka Slovenije said that the banks themselves had sent the lists of companies to the central banks, as he was quizzed about his role in due diligence procedures, transfer of claims to DUTB and other bail-out procedures.
"I never worked in supervision, but I'm objectively responsible as a member of the Banka Slovenije board of directors," he said, adding that when it came to the bailout, it would be wrong if the central bank had acted differently.
According to him, the transfer of claims to BAMC was transparent, with lists of companies to be transferred being made by the banks, as they were obliged to know their clients.
It was determined with a government decree which claims will be transferred, said Fabijan, who could not tell whether Banka Slovenije made any interventions in the lists. "Perhaps something was changed, but not too many times."
This was done in any case with consent from the banks, and the decree determining the criteria for the transfer of claims gave the banks and BAMC absolute advantage compared to Banka Slovenije, he said.
He added that the central bank had only participated in the process and admitted that he had been visited by a few representatives of companies claims to whom were planned to be transferred to BAMC.
STA, 28 October 2019 - The National Council unanimously vetoed the government-sponsored bill designed to provide legal recourse for holders of subordinated bank liabilities wiped out in the 2013 bank bailout, with the interest group proposing the suspensive veto arguing that the bill does not regulate the issue appropriately.
Following the veto from the upper chamber of parliament, the bill, which was passed in a 46:34 vote in the National Assembly last week, will now have to undergo a re-vote and get an absolute majority to be confirmed.
The National Council voted 24 votes for and none against to suspend the implementation of the bill, which aims at providing easier access to recourse for up to 100,000 potential plaintiffs, both shareholders and holders of junior bonds wiped out on instruction of the EU.
But it may take a while before the erased investors are compensated as, in addition to the opposition from the National Council, the central bank had announced a constitutional review.
The veto in the upper chamber had been proposed by the interest group representing employees, which argues that the bill does not provide effective recourse, as councillor Maja Lah reiterated at the session today.
The bill relates to the ruling of the Constitutional Court in 2016, which says that the affected subordinated creditors and shareholders did not have sufficient access to recourse under existing legislation.
Involving up to EUR 963 million, the bill has been a controversial topic.
The proponents of the veto claim the government-sponsored bill falls short of what the Constitutional Court ordered.
When it proposed its own version of the bill in April, the upper chamber said that excessive procedural costs would discourage potential plaintiffs from suing the central bank Banka Slovenije.
The National Council argues that the bill fails to address reservations regarding the exclusive jurisdiction of the Maribor District Court in procedures related to disputes under the bill, as well as the issues related to determining court fees.
It believes the bill also does not address the issues related to the protection of personal information of plaintiffs and the issue of out-of-court settlement with the payment of a lump-sum compensation to the former holders of subordinated bank liabilities.
Lah said that Banka Slovenije as the regulator who had insight into all details of the functioning of the banking system had a professional, personnel and information advantage over a typical small investor.
Such imbalance could significantly affect the realistic chances of plaintiffs to be successful in lawsuits, she said, adding that the group was also critical of the intention to incentivise plaintiffs to group themselves by lowering court fees.
"This results in an unjustified differentiation between 30 or more plaintiffs, who would file a lawsuit together and have a joint representative, and other plaintiffs who would not meet conditions to do so," the veto proposal says.
This could also constitute a violation of the right to free selection of the representative, as plaintiffs who want to reduce their costs for court fees would be forced to agree on a single, joint representative.
Arguing against the veto, Finance Ministry State Secretary Metod Dragonja said that the bill was "protecting the taxpayers and budget", noting that potential damages would have to be paid by Banka Slovenije from its reserves.
Regarding the disclosure of personal information of the former holders of subordinated bank liabilities, he said that the public interests superseded their interest, as the funds for damages would be secured from public sources.
The bill envisages lump-sum compensations of up to EUR 20,000 to uninformed investors. "This is a civilised option of out-of-court settlement for those who waive the right to use further legal remedies," Dragonja added.
National councillor Matjaž Gams meanwhile pointed to the alleged overestimation of the shortage in the state-owned banks, estimated at the time at EUR 1.5 billion.
He wondered who would be held responsible for that given the fact that this resulted in money being taken away from holders of subordinated bank liabilities.
STA, 6 September 2019 - Slovenia's largest banking group, NLB saw its half-year-net profit fall by 10% year-on-year to EUR 94.3 million despite higher interest and non-interest income.
Profit before impairments and provisions was up 13% to EUR 116 million, according to the interim report released by the bank on the website of the Ljubljana Stock Exchange.
Total net operating income amounted to EUR 257.4 million, a 6% increase y/y. Net interest income rose by 5% to EUR 159 million, and net non-interest revenue increased by 8% to EUR 98.3 million.
Net interest income rose in all banks of the group as a result of loan volume growth and lower interest expenses. Subsidiary banks in SE Europe continued to perform well, contributing 38.4% to the group's profit before tax.
Net loans to customers rose by 3% year-on-year to EUR 7.28 billion, while deposits went up by 7% to EUR 10.75 billion. The growth was mainly due to retail deposits.
This year saw a gradual increase in new consumer and housing loans. The share of consumer loans in all gross loans rose from 26% in the first half of 2018 to 28% in the first half of 2019.
The group's total assets rose by 5% to EUR 13.16 billion. This is attributed mainly to the continuous inflow of retail deposits.
NLB also reports having continued with the trend of improved credit portfolio quality. The proportion of non-performing loans dropped to 6%, 2.3 percentage points down compared to a year ago.
The internationally comparable non-performing exposure ratio dropped by 1.7 percentage points to 4.1% in line with the European Banking Authority guidelines, which is very close to the mid-term target of 4%.
Total capital ratio for the NLB group at the end of June reached 16.5%.
"NLB Group is on a good path toward meeting its mid-term financial targets despite the increasingly challenging economic environment of low interest rates," the bank commented on the results.
The parent bank generated EUR 122.6 million in profit, which compares to EUR 103.3 million in the first half of last year.
The macroeconomic outlook suggests the countries where the group is present are likely to post growth rates of between 3% and 4%, if supported by loose monetary conditions, fiscal easing and solid domestic demand.
"Considering these circumstances and presented risk factors, in 2019 the Group aims to achieve a single
digit % increase of revenue and pre-provision profit with continued loan growth (in line with GDP
dynamics) and stable net interest margin," reads the release.
The results were reviewed by the bank's supervisory board today.
The board also gave a green light to establishing a new leasing company, as restrictions on leasing activities ceased to apply following the bank's completed privatisation earlier this year.
STA, 4 September 2019 - Abanka Group generated EUR 26.3 million in net profit in the first six months of the year, according to unaudited report, which is 32.3% less than in the same period last year. Net interest revenue was down by 0.5% and net non-interest income by 19.5%, Abanka said on Wednesday.
Net interest reached EUR 29.8 million and net non-interest income stood at EUR 27.3 million, according to a report published on the web site of the Ljubljana Stock Exchange.
The bank's supervisory board got acquainted with the results on Tuesday.
The total assets of the group, which includes the Abanka bank and real estate company Anepremičnine, amounted to EUR 3.76 billion at the end of June, after standing at EUR 3.73 billion at the end of December.
Anepremičnine contributed EUR 17.4 million or 0.5% to the group's consolidated total assets.
Abanka posted a net profit of EUR 26.2 million in the January-June period, down 35.2% from the same period last year. Its market share reached 9.4% at the end of June.
Net interest was up by around 1% to EUR 29.8 million, while net non-interest income dropped by a quarter to EUR 26.2 million.
The bank said the rise in net interest was due to higher interest income from loans to non-banking clients.
Abanka's cancelled provisions and impairments reached EUR 5.5 million net after topping EUR 13.4 million in the same period last year.
Loans to the non-banking sector reached EUR 2.05 billion at the end of June, which is up EUR 86 million compared to the end of 2018. Loans to legal entities and sole traders increased by EUR 61.9 million and loans to individuals by EUR 24.1 million.
The biggest share of loans, 45.5%, were to individuals, followed by big companies (25.2%) and small and medium sized companies (17.1%).
The state has been Abanka's sole owner since a massive bank bailout at the end of 2013 which also saw the state salvaging NLB, NKBM and Banka Celje. The latter was merged with Abanka in 2014.
In June, a contract was signed on the sale of Abanka, Slovenia's third largest bank, to NKBM bank. The transaction is to be completed by the end of the year.
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