Bloomberg News

Nova Ljubljanska Says Asset Writedowns May Ease in Last Quarter

October 28, 2011

Oct. 28 (Bloomberg) -- Nova Ljubljanska Banka d.d. , Slovenia’s biggest bank, said asset writedowns may ease in the final quarter of the year after the loss for the first nine months more than doubled on higher reserves for problem loans.

The net loss rose to 96.3 million euros ($137 million) from 33 million euros a year earlier, the Ljubljana-based lender known as NLB said in an e-mail statement yesterday. Asset writedowns and reserves against bad loans jumped 49 percent to 264.2 million euros.

“The third quarter was marked by a very severe business environment and a high number of insolvency procedures, so the bank had to write down assets for those credit risks,” NLB said in the statement. “In the last quarter of the year, the bank expects a lesser need for further writedowns and therefore lesser pressure on earnings.”

NLB, whose shareholders approved a 400 million-euro capital increase yesterday, may post a full-year loss of about 80 million euros, Delo newspaper said on Sept. 2, as the bank struggles with a deterioration in assets from the 2009 recession. A faltering Slovenian economic recovery has pushed more companies into bankruptcy or receivership, affecting the country’s banks.

The bank may ask the European Union rescue fund for assistance if the Slovenian government and KBC Groep NV, the two biggest investors, fail to agree on who will provide the proposed 400 million euros capital increase, Bozo Jasovic the Chief Executive Officer said yesterday.

Nova Ljubljanska in July barely passed the European Union stress test. The bank said yesterday it had a core Tier 1 capital ratio of 7.7 percent at Sept. 30. The bank needs to boost the ratio to more than 9 percent by June next year, Slovenia’s central bank said yesterday.

--Editors: James Kraus, Chris Peterson

To contact the reporter on this story: Boris Cerni in Ljubljana at

To contact the editor responsible for this story: James M. Gomez at

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