STA, 2 March - After Slovenia's largest bank, NLB, acquired the Slovenian subsidiary of Russia's Sberbank, Sberbank's operations in Slovenia resumed today with NLB chairman Blaž Brodnjak reassuring clients they have "no reason to worry any more, open accounts at other banks or transfer assets to other banks". They have full access to their money again, he said.

"Sberbank is already part of the NLB group and NLB owns it. Business will be conducted absolutely normally today, cash withdrawals will be unlimited and all Sberbank clients can use NLB ATMs free of charge already," Brodnjak said after Sberbank was closed for two days, and transactions and money withdrawals for clients limited to EUR 400 a day.

There will be no major changes for the 40,000 Sberbank clients, as they will continue to use this bank and keep their bank cards, he added.

NLB will first change the name of the previously Russian-owned bank, which was on the verge of collapse after the Russian bank's European division was forced to suspend operations in the face of the Ukraine crisis.

Then the bank will be gradually integrated into NLB. Only after this process is concluded, which is expected to take over a year, will the bank accounts be transferred to NLB.

Some operative problems may still occur today as the bank reopens but customers should not worry about that, Brodnjak said.

"Sberbank has NLB's potential at its disposal today, and liquidity reserves of billions of euros, which exceed all deposits at Sberbank, have no burdens and can be accessed at any time," he stressed.

Sberbank has its own liquidity reserves as well and now it can also access those of the whole NLB group, he added.

"We will give as much money as necessary, but we are convinced there will be no more rush as of today."

Brodnjak would not reveal how much NLB paid for Sberbank beyond saying that the sum was "appropriate given the circumstances".

The takeover has already been approved by the Competition Protection Agency, which said it had issued a decision on the early implementation of concentration while taking into account the public interest in the Republic of Slovenia.

In line with the relevant law, the agency may exceptionally issue such a decision before authorising the implementation of concentration to a certain extent or under certain conditions.

The condition is that the entity demonstrates in the proposal for acquisition that such implementation is necessary in order to maintain the value of the investment or to provide services of general interest, the agency said.

NLB signed the agreement on the takeover of the only Russian-owned bank in Slovenia with the central bank on Tuesday to preserve the financial stability in the country in the face of sanctions against Russia.

With the acquisition of Sberbank, NLB again becomes the leading Slovenian bank, controlling some 30% of the market measured by total assets to leapfrog the Hungarian OTP Bank Group.

Brodnjak said he was proud to see NLB, which needed to be rescued in the past, assume the role of a rescuer.

Sberbank currently has a dozen branches in Slovenia and NLB will soon have 71. Brodnjak said it was too early to say how the acquisition would affect this number and the number of Sberbank staff in the future.

At the moment, no changes will be made, and the management will also stay the same. However, the NLB will strive to appoint a new supervisory board as soon as possible, he said.

STA, 1 March 2022 - Slovenia's largest bank, NLB, has acquired the Slovenian subsidiary of Russia's Sberbank in a move that the central bank said would preserve the financial stability in the country after Russian-owned banks suffered a loss of trust due to sanctions against Russia.

"There were two options for the resolution of the Slovenian Sberbank: either it ceases operations and savers are compensated in accordance with guarantee scheme rules, or it gets a new owner," the central bank said Tuesday evening.

The sale means that Sberbank branches will reopen tomorrow after two days of closure and limited transactions for clients. "All Sberbank clients will conduct banking services without disturbances from tomorrow." [ed. Wednesday]

NLB has acquired Sberbank's equity as well as all assets, liabilities and clients. "This is a fast and effective solution for all clients who suddenly found themselves in a difficult situation," NLB chairman Blaž Brodnjak said in a press release.

"At the close of the transaction, Sberbank Slovenija will get a strong and committed owner who will ensure smooth operation with its capital and know-how," he was quoted as saying.

The decision was reached in agreement with the EU's Single Resolution Board, which determined that Sberbank's subsidiaries in Slovenia and Croatia were "failing or likely to fail due to a rapid deterioration in their liquidity situation," even as it decided no resolution was necessary for their Austrian parent, which will be liquidated.

SRB chair Elke König said the three decisions "protect financial stability and the depositors up to an amount of EUR 100,000 in Austria and with no limits in both Slovenia and Croatia."

"Today, we acted to protect the public interest and ensure financial stability. All of this has been done without having to use public funds, so not only are Sberbank's customers protected, the taxpayer is too."

The price of the NLB transaction has not been revealed. Central bank governor Boštjan Vasle told the TV show Odmevi that there had been significant interest by the largest and most important banking institutions. The Single Resolution Board picked the solution that satisfied the largest number of criteria.

Slovenian Sberbank is the only Russian-owned bank in Slovenia.

STA, 24 February 2022 - The Slovenia-based banking group NLB posted a record profit of EUR 236.4 million in 2021, a substantial growth compared to the previous year, excluding effects from the acquisition of Komercijalna Banka in Serbia, shows unaudited data published on the website of the Ljubljana Stock Exchange.

"The results of our business operations in 2021 show that we have successfully left the epidemic far behind us and more importantly, that we have emerged from it stronger than ever," said NLB CEO Blaž Brodnjak as the unaudited 2021 results were published.

Last year, NLB acquired Komercijalna Banka Beograd to become a major player in seven markets in South-East Europe, and integrated two banks in Montenegro - NLB Banka Podgorica and Komercijalna Banka Podgorica.

"The supervisory board is pleased that the NLB Group has successfully utilised the opportunities offered by the supportive economic environment of strong GDP growth in the region, healthy private consumption, and loan demand," said Primož Karpe, chairman of the supervisory board.

Net interest revenue was up by 37% to EUR 409.4 million last year, to which Komercijalna Banka contributed EUR 98.5 million. Excluding this, a 4% growth was recorded, mostly due to strong rise in loans.

The growth in net fee and commission income was at 39%, which NLB labelled as "impressive".

The group attributes this to "high demand for investment products, such as asset management and bancassurance products, together with high income from activities related to general business activities".

Loans were up by 9% and deposits by 8%. Deposits from customers increased by 5%, which shows that savers transferred part of their savings to alternative investments.

NLB released EUR 35.8 million worth of impairments and provisions.

In the future, the group plans to focus on intensive digitalisation and improving of user experience and its sustainability.

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.

STA, 19 October 2020 - The Nova Gorica Administrative Court has annulled the dismissal of former director of the National Bureau of Investigation (NBI; Nacionalnega preiskovalnega urada – NPU) Darko Muženič, web portal 24ur.com reported on Monday. The case was remanded to police for re-examination. The court's decision is final, so there is no possibility of an appeal.

Muženič decided to challenge his 6 May dismissal at the Administrative Court, claiming the no-fault dismissal procedure used to dismiss him in line with the act on public servants only applied to political office holders.

Following a change in power, the then acting Police Commissioner Anton Travner replaced Muženič with Igor Lamberger, invoking provisions from the act governing the operations of the police and the act on civil servants.

The police said these provisions allowed the police commissioner to replace the NBI boss within a year since the police commissioner was appointed or within a year since the NBI director was appointed without providing any of the reasons the law stipulated for dismissal.

Muženič's lawyer Uroš Leben, however, claimed the NBI was only one of the police force's internal organisational units, meaning its director did not fall under the provisions of the public servants act, which refer to the termination of terms of public office holders, and the court upheld this view.

Leben told Večer today that the court's decision meant that Muženič's employment contract was still valid. He thinks the Interior Ministry or the police should call Muženič back to work in a few days.

"In case the ministry or police do not do that, we will have to wait for a decision of the Labour and Social Court, where Darku Muženič has filed a suit against the ministry and police over wrongful dismissal," the lawyer said.

Interior Minister Aleš Hojs commented on the court's decision at today's parliamentary session responding to a question from MP Nik Prebil from the opposition Marjan Šarec List (LMŠ). "Up to this moment, I have not been informed that there was something wrong with this procedure," he said.

"If the court issued a decision or ruling, which as you say returned Muženič to his old job, then we must first see what the court said in this ruling," he said, adding the court's decision must be studied before any "relevant responses" could be given.

"It's difficult for me to comment on what this or that web portal wrote, of course one of those that have a great interest that nothing happens at the NBI or that everything stays the way it was. Meaning that after 10 years ... the most demanding criminal acts are not being investigated," he said.

The minister assessed that the NBI had not been very successful under different heads so far, which is why the ministry plans its reorganisation.

"Given that there has been quite a few proposals that the function and status of this NBI should be defined more clearly within the organisation and work of the police act, we will approach this in the sense of amendments to this law, which we plan sometime by the end of the year," he said.

The police force told the STA today it had not received the ruling yet so it could not comment. But it noted that it honoured courts' decisions.

The NBI is currently headed by acting director Petra Grah Lazar as the third new leader of the specialised police unit for white-collar crime since May. She was appointed last week after her predecessor Uroš Lepoša stepped down less than three months on the job citing personal reasons.

Lepoša was appointed on 29 July to replace Lamberger after a similarly brief stint.

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.

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.

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, 13 February 2020 - There was much controversy on Thursday as the parliamentary Commission for the Oversight of Intelligence and Security Services discussed the state prosecution's decision to reject a criminal complaint filed by a parliamentary inquiry over an alleged Iranian money laundering scheme at NLB bank a decade ago.

Addressing reporters after the session, Janez Janša, the leader of the Democrats (SDS), said that the session heard "things that explain much of what is happening" and what was keeping the media busy these days, something that would become very concrete in the future, which he said was "from now on".

After what the commission heard today, Janša said it had become obvious why the "law enforcement authorities that should have investigated the matter found there was nothing wrong (...) People who made possible a criminal act of epic proportions investigate themselves."

Darko Muženič, now director of the National Bureau of Investigation (NBI), served at the Office for Money Laundering Prevention at the time that roughly one billion US dollars was allegedly laundered through NLB bank.

In a bid to "protect the dignity and integrity" of the NBI and Muženič, Police Commissioner Tatjana Bobnar explained today that Muženič at the time served in the department of the Office for Money laundering that was not in charge of the Farrokh case.

Farrokh was the name of the company of Iranian citizen Iraj Farrokhzadeh that the parliamentary inquiry in 2018 found laundered the money on behalf of Iran to skirt international sanctions.

The prosecution's decision of July last year not to prosecute abuse of office suspects in the case was debated by the parliamentary Home Affairs Committee on Wednesday, but the session was suspended because the SDS and the fellow conservative New Slovenia (NSi) wanted to hear from NBI and NLB representatives, who were not present at the session.

NSi deputy Jernej Vrtovec described the findings of investigators which prompted the prosecution not to prosecute as very unusual.

The case was the subject of two parliamentary inquiries, whose extensive reports allege that NLB bankers failed to exercise due oversight and abused their powers at last in the case of some transactions, said Vrtovec.

The police said that that Tuesday's session of the Home Affairs Committee was attended by Police Commissioner Bobnar, who is the NBI director's superior, and director of criminal police Boštjan Lindav.

The police noted that it was the criminal police and not NBI investigators which in 2010 and 2011 handled the case of alleged money laundering at NLB.

Bobnar noted that the police directorate had reviewed police activities in that case 2017 and that the guidelines issued by the then interior minister in connection to that had been fully implemented.

She said that the special department of the specialised prosecution service had rejected a criminal complaint filed against criminal police investigators over the case.

Bobnar also said that the police performed their duties in accordance with the standards of evidence, in compliance with the constitution, penal code and the criminal procedure act and as an independent body whose work in the pre-trial procedure can only be directed by the state prosecutor in charge.

A specialised investigation group formed in 2017 and comprising representatives of the NBI, Office for Money Laundering Prevention and the central bank drew up a plan of work in the Farrokh case to look into suspected criminal offences, including money laundering, terrorism financing and abuse of office.

In the case pertaining to suspected abuse of office, the state prosecutor in charge issued a decision in July 2019 rejecting the criminal complaint by the parliamentary inquiry.

However, Bobnar noted that the specialised investigation group continued work in connection to other suspected criminal offences in the case.

All our stories on money laundering are here, while those on Iran are here

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%.