Slovenia anticipated rate cuts -finance minster
LJUBLJANA, April 26 |
LJUBLJANA, April 26 (Reuters) - Moody's downgrade of Slovenia's three largest banks was "somewhat expected" but their ratings should improve once planned capital hikes are completed, Finance Minister Janez Sustersic said on Thursday.
"Lower economic growth ... reflects itself in the worsening of the quality of bank portfolios so a cut of their rating was somewhat expected," Sustersic told a news conference.
Moody's cut on Wednesday by one notch the ratings of state-owned Nova Ljubljanska Banka (NLB) and Nova KBM and privately owned Abanka Vipa due to "the sharp asset-quality deterioration" and poor loss-absorption capacity.
NLB and NKBM now have deposit ratings of Ba2, while Abanka's rating is Ba3, Moody's said, adding a further cut in the banks' ratings was possible.
"When the agreement on the capital hike (for NLB) is reached, that will have a positive impact on the ratings of our banks," Sustercic said.
NLB must increase its capital by 400 million euros ($527.4 million) by the end of June, under European Banking Authority demands. Sustersic said the government was in talks with private investors to agree who would inject fresh capital.
According to Slovenian media, Belgian banking and insurance group KBC, which owns 25 percent of NLB, the European Bank for Reconstruction and Development and the International Financial Corporation (IFC) are among those investors.
Abanka announced on Wednesday it was planning a capital hike of 50 million euros while NKBM is in talks with the European Investment Bank for a loan of 100 million euros. ($1 = 0.7585 euros) (Reporting By Marja Novak; editing by Zoran Radosavljevic and Michael Roddy)
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