Ljubljanska Banka – One More Stumbling Block between Croatia and Slovenia

Total Croatia News

ZAGREB, February 23, 2018 – Slovenia’s government is prepared to protect the New Ljubljanska Banka (NLB), the successor of the defunct Ljubljanska Banka, against possible distress orders if it loses cases being heard by the Croatian courts in reference to Yugoslav-era foreign currency savings kept by Croatian citizens, who were paid out through the Privredna Banka Zagreb and Zagrebačka Banka, Slovenia’s media reported on Thursday.

Slovenian Radio reported that measures to safeguard the NLB against claims submitted by two Croatian banks were to have been on yesterday’s government agenda, however, that has been postponed for next week because the government and finance ministry have not fine-tuned their opinions, but also due to disagreements within the ruling coalition.

Several prominent public figures, including President Borut Pahor’s adviser for finances, France Arhar, have criticised the NLB management and even called for the bank’s director, Matjaž Brodnjak, to resign following their decision to pay out several hundred thousand euro on the basis of just one court ruling concerning transferred foreign currency savings.

Foreign Minister Karl Erjavec labelled Brodnjak’s decision as unlawful. Erjavec reiterated Ljubljana’s stance that the Yugoslav-era foreign currency savings accounts were a question of succession to the Socialist Federal Republic of Yugoslavia (SFRY), and that suspension of those court proceedings against NLB in Croatia was agreed under on a memorandum between the then prime ministers, Zoran Milanović of Croatia and Janez Janša of Slovenia, five years ago.

Slovenian Radio said that only a few final rulings have been delivered in Croatia in cases against NLB, that is, against Slovenia as the owner of that bank, but the potential damage for Slovenia could be quite high.

Claims are estimated to be around 170 million euro, in addition to just as much in default interest as these claims have been accumulating for thirty years. It is suggested that NLB should create special contingencies for expenditures that may come in a series of verdicts against it by Croatian courts, or else the lender could lose its licence with the European Central Bank.

Despite NLB operating with a profit last year, this year it might not be in a position to pay dividends to its owner (government).


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