LJUBLJANA, Aug. 10 (Xinhua) -- Slovenian government announced on Friday that the European Commission has approved Slovenia's proposal for changed commitments for the sale of the country's largest bank NLB, which includes Slovenia selling at least half of the bank by the end of the year.
The press release from Slovenian Financial Ministry said the remainder up to a controlling interest of 25 percent plus one share is to be sold by the end of 2019.
"The European Commission has concluded that Slovenia's aid for Nova Ljubljanska Banka (NLB) remains compatible with EU state aid rules on the basis of a new commitment package submitted by the Slovenian authorities on 13 July 2018," the Commission said on Friday.
According to the release, Slovenia has "firmly committed to an ambitious time schedule for NLB's sale with a first sale tranche of at least 50 percent plus one share by the end of 2018".
Should the country fail to respect the deadlines, a trustee will be appointed to complete the sales procedure, while the key existing commitments, including a ban on re-entering businesses the bank has sold as part of the restructuring and the ban on acquisitions, have been prolonged.
"An important commitment in this regard is the return on equity commitment, which ensures that NLB can only grant new loans if the bank receives a minimum return on equity on those loans," the Commission said, noting that this would help ensure the long-term profitability of the bank and limit undue distortions of competition.
Under the new package, Slovenia also pledged to close additional branches in Slovenia and to sell its stake in its insurance arm NLB Vita unless the full sale is completed by the end of the year.
NLB will also issue a so-called Tier 2 bond or subordinated debt, "to further remove any viability doubts".
