Press release - 5 November 2013 - Factor banka and Probanka

The special administration of Factor banka and Probanka submitted to the Bank of Slovenia by the required deadline a revised report on the financial position of the banks and proposed measures for the restructuring of the banks, which envisage the gradual winding up of operations (restructuring plan). The Governing Board of the Bank of Slovenia discussed and approved the plan on 5 November 2013. The plans will be forwarded to the Ministry of Finance, which will submit them to the European Commission in order to obtain a final opinion regarding measures taken by the Slovenian government to enhance the stability of banks.

According to the plan, the restructuring of both banks will be completed by the end of 2016. The Slovenian government’s commitment to ensure the solvency of Factor banka and Probanka and the guarantee issued for an emergency loan allow the banks to gradually restructure operations with the aim of repaying all ordinary creditors. Measures imposed on the banks have helped maintain confidence in the banking and financial system, as no negative developments have been seen at other banks and savings banks.

Since the appointment of the special administration, the banks have been operating smoothly and settling all of their obligations. They have also been actively involved in the process of restructuring individual claims.

The revised financial position of Factor banka and Probanka confirms the Bank of Slovenia’s initial assessment regarding the deficit in the assets of both banks, assuming the coverage of losses by the banks’ owners and holders of subordinated equity instruments. The banks assess the deficit to be EUR 434 million.

It can also be derived from the restructuring plan that Factor banka will draw down on an emergency loan in the maximum amount of EUR 347 million (the Slovenian government’s guarantee amounts to EUR 540 million) to settle maturing liabilities, while the maximum amount for Probanka will be EUR 294 million (the Slovenian government’s guarantee is EUR 490 million).

The priority of the special administration of both banks is to achieve the maximum possible repayment of loans granted and other investments in order to minimise the amount of state aid required to fully repay liabilities to ordinary creditors.