An investment of €80 million in CRR compliant AT1 capital instrument to be raised by Nova Ljubljanska Banka d.d. ("NLB"). It would be the first such capital instrument to be placed by a Slovenian bank. The AT1 instrument would be rated and listed on the Luxembourg Stock Exchange.
With this investment, EBRD is seeking to make a tangible contribution to NLB's resilience, by improving the quality of NLB's capital base, supporting capital optimisation and growth strategy as well as facilitating the meeting of regulatory requirements.
ETI score: 61
The expected transition impact stems from the resilient and competitive transition qualities:
- Resilient: The Project will strengthen and optimise the capital structure of a systemic banking group in Slovenia with strong regional presence, supporting its growth ambitions, improving the Group's resilience, and will facilitate introduction of a new instrument to the Slovenian market.
- Competitive: NLB would allocate 2.5x the amount of EBRD proceeds for financing of MSME clients across the countries where NLB Group operates. The Project supports continued funding flow to MSMEs, including those affected by the war in Ukraine, boosting their competitiveness in a challenging environment.
NOVA LJUBLJANSKA BANKA DD
NLB is the largest banking group in Slovenia with ~30%market share by total assets. NLB is classified as other systematically important institution (O-SII) in Slovenia and is part of NLB Group that has operations in five Wester Balkan countries. As of end-H1 2022, NLB Group had total assets of €23 billion and total equity of €2.3 billion. Following NLB's privatisation in 2018, the stake of Republic of Slovenia ("RoS") in NLB declined from 100% to 25%. NLB is listed on Ljubljana and London Stock Exchange. NLB's credit rating is Baa1 (stable) by Moody's and BBB (stable) by S&P.
EBRD Finance Summary
Total Project Cost
The project demonstrates strong additionality by offering tenor and a financing structure that is not available on the market on commercial terms. AT1 is a perpetual instrument with no incentive to redeem and NLB will be the first Slovenian bank to issue such instrument. In the current environment of highly disrupted capital markets, EBRD's role is instrumental for NLB's ability to raise AT1 capital and consequently continue the flow of credit to MSMEs, including those directly and indirectly impacted by the economic uncertainty related to the war in Ukraine.
Environmental and Social Summary
Category FI (2019 ESP). NLB is an existing client of the Bank with experience of applying the EBRD's EHSS Procedures, and with the internal capacity to manage EHS issues to the standards required by the Bank. For the proposed transaction, NLB would be required to apply PR2 and 4 to their own staff and apply the Bank's EHSS Procedure for Corporate, Micro and Small Loans to the lending activities associated with the allocation of funds being made by the client. These lending activities will also require to adhere to the Banks Environmental and Social Exclusion List; and adhere to the PR 9 requirements for Cat A Projects and the Referral List as updated in the 2019 policy. The Company will be required to report to the Bank on PR compliance and the associated lending activities.
Technical Cooperation and Grant Financing
Company Contact Information
Valerija Pesec, Head of Investor Relations
+ 386 1 476 9122
PSD last updated
23 Sep 2022
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