LJUBLJANA, Dec 12 (Reuters) - Slovenia’s government stands ready to buy bank Nova KBM’s contingent convertible capital bond for 100 million euros ($130 million) if private investors are not interested, the finance ministry said on Wednesday.
“The state would be happy if private investors would buy the bond but is ready to provide the capital itself if no agreement (on the purchase) is reached with a private investor,” the ministry said in a statement on Wednesday.
NKBM plans to issue the bond this month in order to raise its Core Tier 1 capital solvency ratio to 9 percent of assets by the end of the year as required by the European Banking Authority. The bank had a ratio of 7 percent at the end of June.
The state-owned bank postponed until next year a new share issue of 50 million euros which was also planned for December after it earlier this week managed to sell its 51-percent stake in an insurer Zavarovalnica Maribor to two local firms for 65 million euros.
Slovenian banks, mostly state-owned, are nursing a total of 6.7 billion euros of bad loans, equivalent to 19 percent of annual GDP, fuelling speculation that the country may need a bailout next year.
In October the country, which joined the euro zone in 2007 and fell back into recession in the third quarter of this year, managed to issue its first sovereign bond in 19 months, averting a bailout for at least six months. ($1=0.7693 euros) (Reporting By Marja Novak; Editing by Greg Mahlich)