Brussels, 22/08/2014 (Agence Europe) - In mid-August, the European Commission ruled that the restructuring plan for Slovenian bank Abanka Vipa (Abanka) complied with EU state aid rules.
In February 2014 Slovenia notified a restructuring plan for Abanka, the country's third-largest bank, to the Commission. The plan covers a first State recapitalisation of €348 million, temporarily authorised by the Commission in December 2013, and a second recapitalisation of €243 million together with a transfer of assets to the Slovenian asset management company (BAMC) of €1.087 billion (gross book value).
In a press release, the Commission explains that Abanka will limit the scope of its activities to its core business. The bank will improve its corporate governance and risk management policy and clean up its balance sheet through a transfer of non-performing loans to the BAMC. The idea is for the bank to build a profitable business model that will enable its return to viability. As part of the restructuring, all shareholders and subordinated debt holders of Abanka have been written off.
Slovenia has pledged to merge Abanka with Banka Celje and submit a restructuring plan for the joint entity by the end of 2014.
The Commission concluded that the restructuring plan of the Slovenian bank is in line with EU state aid rules for banks during the financial crisis.
“After our decisions on NLB and NKBM, today's decision will further strengthen the confidence in the Slovenian banking system,” commented Competition Commissioner Joaquín Almunia in a press release. On 18 December 2013 the Commission approved the restructuring plans of Nova Ljubljanska banka d.d. (NLB) and of Nova Kreditna Banka Maribor d. d. (NKBM), as well as aid for the orderly winding down of Factor Banka d.d. and Probanka d.d. (see EUROPE 10988). (MB)