According to the writings of Slovenian media the European Commission will require from NLB to sell their share in the life insurance company NLB Vita due to the untimely privatization.

According to the writings of Slovenian media the European Commission will require from NLB to sell their share in the life insurance company NLB Vita due to the untimely privatization. The sale of NLB Vita is supposed to serve as a penalty because the Slovenian Government failed to sell 75% of NLB’s shares on time, which the Government committed to when it recapitalized the bank. However, according to the media, the transaction can be done informally.

As a reminder, in the spring of 2017, just before the completion of NLB’s first public offering of shares through the London and Ljubljana Stock Exchange, the Slovenian government decided to suspend the sale. The reason behind the decision was that the share price lowers the risk of Croatian judgments due to the transferred deposits of Croatian savers of Ljubljanska banka. The government then negotiated a postponement of the bank’s privatization, and finally sold 65% last year, and 10% this year. However, due to the delay, the European Commission is apparently demanding the sale of NLB Vita.

Turning our attention to NLB Vita, the company generated EUR 8.3m in net profit last year while GWPs amounted to EUR 76.9m, which represents a 9% YoY increase. Of this, EUR 73.1m was from life insurance premiums. Market share wise, at the end of 2018 the company held a 14.6% market share in classic life insurance.

Note that NLB owns a 50% share in NLB Vita, while the remaining share in this joint venture is owned by KBC Insurance.