Brussels, 09/09/2013 (Agence Europe) - On Friday 6 September, the European Commission gave the temporary go-ahead to state aid from Slovenia to two Slovenian banks, Factor Banka and Probanka worth €540 and €490 million respectively in the form of state guarantees on the banks' newly issued liabilities.
The Commission cleared the state aid on the grounds that it believes it is necessary to ensure Slovenia's financial stability without unduly distorting competition. The aid is the strict minimum and is adequately remunerated.
The aid was introduced to reassure the markets and stabilise the two banks' assets in the wake of €7.5 billion of doubtful loans. It has been temporarily approved for two months, while awaiting a final decision from the Commission on a plan to restructure or wind down the banks in an orderly manner.
The temporary approval of capital from the state is the standard procedure for the restructuring or winding-down of banks. No contribution from depositors or other senior debt holders of the two banks is required under EU state aid rules.
Factor Banka and Probanka are universal banks operating mainly in Slovenia. Factor Banka holds approximately 2.1% of the assets in Slovenia's system and total assets of around €911 million. Probanka d.d. holds approximately 2.3% of the assets in Slovenia's banking system and total assets of around €973 million. (FG/transl.fl)