June 19, 2019 / 3:35 PM / in a month

Privatization of Slovenia's Abanka will see it merge with domestic rival

LJUBLJANA (Reuters) - Slovenia said on Wednesday that its second biggest bank Nova KBM (NKBM) will buy the country’s No. 3 lender Abanka after submitting the winning bid in a scheme to privatize the lender.

FILE PHOTO: A man and a child walk past the office building of Abanka bank in Ljubljana December 12, 2013 REUTERS/Srdjan Zivulovic/File Photo

Slovenia promised to sell Abanka, which is 100% state owned, in exchange for the European Commission’s approval of state aid to the bank in 2013.

Slovenian Sovereign Holding (SDH), which is in charge of privatizations, said NKBM, which is owned by U.S. investment fund Apollo, put in the best bid. Details of the deal will be disclosed after the sales contract is signed, which is expected on Thursday.

“The (sales) procedure was quite long, transparent and competitive,” Igor Krzan, president of the management board of SDH, told reporters.

Apollo could not be reached for comment.

According to local media, Hungarian bank OTP was the other bidder for Abanka. Daily Delo had reported that each bidder was offering about 400 million euros ($449 million) for the bank.

Abanka has a market share of about 9.6% when measured in balance sheet assets. With the takeover, Apollo will increase its share of Slovenia’s banking market to around 22%.

Abanka received state aid worth 780 million euros in 2013 and 2014, which prevented it from collapsing under a large amount of bad loans.

The unlisted Abanka reported earlier on Wednesday that its net profit fell to 18.6 million euros in the first quarter of this year, from 25.5 million euros a year ago, mainly due to lower non-interest income this year.

It reduced its bad loans to 3.9% of all loans at the end of March, down by 0.7 percentage point since the end of 2018, it said.

Reporting by Marja Novak; editing by Susan Fenton

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