Bank of Slovenia and the Slovenian Government announced today the results of the stress tests run on ten banks representing 70% of the local banking system. Under the adverse scenario the capital shortfall within the banks from the sample would amount to almost EUR 4.78 billion and over EUR 3 billion will be the capital increases required at three banks - NLB, NKBM and Abanka.
UniCredit Banka Slovenija, the largest foreign owned bank in the country, was one of the banks in the sample and passed the test as the healthiest among all. No capital increase will be thus expected from the Central Bank. At the end of November the bank had a Total Capital Adequacy Ratio of 16.2%.
The full results of the stress test are as follows:
| Bank | Capital deficit under the adverse scenario, EUR million |
Total capital increase, EUR million |
| NLB | 1,904 | 1,551 |
| NKBM | 1,055 | 870 |
| Abanka | 765 | 591 |
| Banka Celje | 388 | 6 months for capital strengthening (until end of June 2014) |
| Gorenjska banka | 328 | |
| Hypo Alpe-Adria-Bank | 221 | |
| Raiffeisen banka | 113 | |
| UniCredit Banka Slovenija | 14 | |
| Total | 4,778 | 3,012 |
(Source: Bank of Slovenia)
The capital shortfall in the three banks will be provided by the government in the form of state aid, two-thirds of which will be in cash and one-third in government securities. All three banks have failed to meet the capital requirements of Bank of Slovenia already before the stress test and were unable to attract private investors.
In order to stabilise the banking system the government will also increase the capital of Factor banka and Probanka (already in the process of being winded down) and of the Bank Asset Management Corporation.
Following the implementaion of all measures the general government debt is forecasted to stand at 75.6% GDP, or 68.5% GDP on net basis.
Full details on the results of the stress test are available through Bank of Slovenia.
Impact on investors: Slovenia will not need EU funds to stabilise its banking sector and the capital shortfall of over EUR 3 billion will be covered in the form of state aid. UniCredit Banka Slovenija, the biggest foreign bank in the country, has emerged from the stress test as the strongest local bank and with the healthiest results.