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Bad bank waiting for Commissions’ approval

The results of stress tests of Slovenian banks have been published and  the organisation which will manage bad assets of banks (i.e. Bad Bank) in waiting for the approval from the European Commission for the transfer of bad debts from the banks. The authorization for transfer to the Bad bank is expected  this year. Slovenia is also waiting for the approval of the Commission for further capitalization of banks. Appropriations should come before Christmas, which means that the procedures at the Commission are in process.  Spain for instance had to wait two months for these approvals. The first in the line for further capitalization are NLB and NKBM.

The Bad bank is supposedly to be ready for the transfer of bad assets. There is  currently  20 people employed, a number which should double in the next year.  The transfer of bad debts should happen in five packages and should have to be finished by late April 2014. First in the line are bad assets from NLB and NKBM, later on those from Abanka, for which a restructuring plan must first be approved by the European Commission. To the Bad bank, assets of 4,5 billion euros for three banks will be transferred, yet their transfer value will be almost three times lower (1,7 billion). Executive Director of the Bad bank Torbjörn Mansson is expecting that the sale of all bad assets will last from 10 to 15 years.

The disclosure of the results of stress tests has already had a good impact on financial markets for Slovenia, as the yield on Slovenian bonds fell to 5.09 percent.


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