Results of EU wide recapitalisation exercise

12/08/2011 / Press release

On 26 October 2011 the European Council agreed on measures to restore stability and confidence in the banking sector. Within this framework, policy measures prepared by the European Banking Authority (EBA) with regard to banks exposure to the Member Countries of the European Economic Community (ECC) were adopted to strengthen the capital positions of  European banks.

The adopted measures require that banks strengthen their capital positions by building up a temporary capital buffer against sovereign debt exposures to reflect current market prices, without taking into account prudential filters on sovereign assets in the Available-for-Sale portfolio. In addition, banks will be required to establish a buffer so that Core Tier 1 ratio reaches a level of 9% by the end of June 2012. The amount of the sovereign capital buffer identified and reflection of market prices used therewith is based on 30 September 2011 figures.

Nova Ljubljanska banka d.d. and Nova Kreditna banka Maribor d.d. are the two Slovenian banks participating in the sample of 71 European Union banks.

Results in detail

Capital exercise conducted by the EBA in close cooperation with Banka Slovenije (National Supervisory Authority), using the EBA common methodology, showed the following.

As of 30 September 2011 the additional capital required by Nova Ljubljanska banka d.d. stands at EUR 320 million and must be achieved no later than end of June 2012.

Nova Ljubljanska banka will ensure that by the end of June 2012 the bank will adhere to the 9% Core Tier 1 ratio and, to this end, submit a plan to Banka Slovenije. The plan will be discussed with Banka Slovenije, in consultation with the relevant college of supervisors and the EBA.

The capital to be raised and measures to be taken by the bank are designed to restore confidence in market participants, to facilitate banks' access to the funding markets as well as to put them in the condition to continue providing financial support to the real economy.

As of 30 September 2011 Nova Kreditna banka Maribor d.d. meets the 9% Core Tier 1 ratio after the removal of the prudential filters on sovereign assets in the Available-for-Sale portfolio and prudent valuation of sovereign debt in the Held-to-Maturity and Loans and receivables portfolios, reflecting  current market prices.

Full results, details of composition of capital and risk weighted assets and Sovereign exposures (Central and Local Government) are available in uniform format enclosed tables provided by the EBA at the following web page Results of EU wide recapitalisation exercise 2011

Additional information on the EBA common methodology may be obtained at the following EBA website