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By Marja Novak
LJUBLJANA, July 13 (Reuters) - The Slovenian government plans to sell at least 50 percent of its largest bank Nova Ljubljanska Banka (NLB) via a stock market listing this year and sell another 25 percent in 2019, Finance Minister Mateja Vranicar Erman said on Friday.
Slovenia was required to sell 75 percent of the state-owned bank in exchange for the European Commission’s approval of state aid to the bank in 2013.
Slovenia had planned to sell 50 percent in 2017 but the government cancelled the sale a year ago, saying the suggested price which valued the bank at a minimum of 1.1 billion euros ($1.28 billion) was too low.
Last year, the government had proposed a postponement of the sale until 2019 but the Commission did not accept this. Slovenia will send its latest plan to the Commission.
The Commission gave no immediate comment but had said in the past the sale of the bank was important to ensure its long-term viability.
Vranicar said the government had also drafted a law that would oblige a state fund to cover damages that NLB might suffer in the future due to Croatian law suits against it which could amount to up to 430 million euros ($501.51 million).
Croatian banks are suing NLB because they took over deposits Croatian citizens held in a Croatian unit of NLB’s predecessor, the now defunct Ljubljanska Banka (LB), before Slovenia’s independence from the former Yugoslavia in 1991.
LB closed its Croatian division after independence without repaying its Croatian depositors. This is because Slovenia has said the issue of the repayments should be part of succession talks between all the states of the former Yugoslavia, which include both Slovenia and Croatia.
“I hope the parliament will adopt the law as soon as possible,” Vranicar said, saying that would boost the price of NLB.
NLB, which has businesses in Slovenia, Bosnia, Serbia, Macedonia, Kosovo and Montenegro, received state aid of 1.55 billion euros in 2013 which prevented it from collapsing under a large amount of bad loans.
Since then the bank has managed to return to profit and reduce bad loans to 8.8 percent of all loans by the end of March from 12.7 percent a year earlier. ($1 = 0.8574 euros) (Reporting By Marja Novak; Editing by Elaine Hardcastle and Jane Merriman)