Minister Damijan Says State Should Scale Down Stake in NLB

Brussels, 16 March

Slovenian Development Minister Joze P. Damijan has reiterated his position that the state should downsize its stake in Nova Ljubljanska banka (NLB) to roughly 25% and offer the rest to strategic partners and portfolio investors.

"This is the best way to improve efficiency and competitiveness," Damijan said in Brussels on Thursday after talks with Guenter Verheugen, the European commissioner for enterprise and industry.
He said this scenario was in line with the plan for the privatisation of Slovenia's largest companies which has been drafted by the committee for reforms (that he chaired) and adopted by the government.
Damijan expressed his personal opinion that the privatisation of NLB, Slovenia's largest bank, "has been a good process, but it has not led to all the positive effects that we were expecting to see."
"It is my personal opinion that in the current situation, the state's role is still too strong; due to relatively poor governance...NLB has not been developing in a direction that would ideally position it to tackle market challenges," he said.
According to him, this is reflected in the fact that the bank has been losing market share. "Banks which are more flexible, have a better ownership structure and a more aggressive business policy have been increasing market shares much faster."
"There is plenty of scope to improve the efficiency of both state-owned banks (NLB and NKBM), especially through privatisation and better corporate governance," Damijan added.
The statement comes amidst media reports that Damijan was considering resigning as minister due to disagreements over NLB privatisation, notably because Finance Minister Andrej Bajuk wants NLB to remain in Slovenian hands.