€400mn capital increase will bolster bank’s balance sheet.
Slovenia’s Nova Ljubljanska banka (NLB) plans to raise €400mn through a rights issue to bolster its balance sheet and operations across Southeastern Europe.
The bank, which also operates in Bosnia and Herzegovina, Montenegro, Kosovo, Macedonia, and Serbia, says several factors have contributed to the need to increase its capital. New Basel III regulation requires banks to hold higher levels of capital; the bank’s own capital adequacy level is lower than that of its competitors; and the bank’s capital instruments comprise debt and fall due in the coming years.
“In order to fulfil higher capital requirements … the bank needs additional capital shortly, which due to the time mismatch cannot be realised only by its own activities without engaging the owners,” the management board said in a statement.
Since the statement, the results of the EU banking stress tests have been published: NLB passed, although noted that the test “indicates the need for strengthening the capital base”.
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