Bloomberg News

NLB Bank Reports First-Quarter Loss as Bad Loans Surge

May 10, 2012

Nova Ljubljanska Banka d.d., Slovenia’s biggest financial services company, extended losses in the first quarter as loan-loss provisions climbed.

NLB had a loss for the parent company of 34.6 million euro for the bank when its units in the Balkans are included, the Ljubljana-based lender said in a regulatory statement. That compares with a profit of 3.9 million euro in the same period a year earlier. Provisions for bad loans were 98 million euros.

“Business in the first three months has been marked by a continued deterioration of the quality of our portfolio,” NLB said in the statement.

Nova Ljubljanska, in which the government holds an indirect majority, may suffer further this year as Slovenia slides into its second recession in three years, pushing more companies into bankruptcy and forcing banks to set aside record levels of bad- loan provisions.

NLB wants to raise 400 million euros in equity capital by the end of June to improve its core Tier 1 ratio to above 9 percent as demanded by the European Banking Authority and the Slovenian central bank.

NLB and other Slovenian lenders, which are relying on loans from the European Central Bank for liquidity, have reduced lending because of restricted availability of financing from outside the country, the central bank said in March.

To contact the reporter on this story: Boris Cerni in Ljubljana at bcerni@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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