The Protection of NLB from Claims of Croatian Savers Has Come into Force

A special law aimed at protecting Nova Ljubljanska Banka (NLB) from the forced collection of transferred savings of Croatian citizens in the former Ljubljanska Bank based on final decisions of Croatian courts came into force on Tuesday in Slovenia.

“The Law on the Protection of the Value of the State Investment in NLB” is the full name of the law adopted at the proposal of the technical government of Miro Cerar.

According to this law, possible forced collections of debts from old foreign currency savings based on final decisions of Croatian courts will immediately be compensated to NLB in the same amount through transfers from the state succession fund or from the budget.

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Cerar has repeatedly stated in recent months that without a special law protecting the state’s ownership stake in NLB, the bank could suffer damages of up to 400 million euros during the sale due to court proceedings in Croatia.

Cerar’s government adopted the mentioned law so that future private owners of NLB would not be burdened by issues related to old foreign currency savings from the time of SFRY, and to achieve the best possible price for three-quarters of NLB’s shares, which it is obliged to sell by the end of next year according to the agreement with the European Commission.

The issue of old foreign currency savings, or transferred savings deposits of Croatian citizens, has been emphasized by Slovenia as the main reason for delaying the sale of NLB. Cerar’s government agreed with the European Commission last week that at least 50 percent of the bank’s shares would be sold this year, and another 25 percent by the end of next year, with the expectation that “lex NLB” will help achieve a better price.

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In Croatia, about 30 court proceedings have been initiated in which Privredna Banka Zagreb and Zagrebačka Banka are suing Ljubljanska Banka and seeking the return of the transferred part of the foreign currency savings deposits that were paid to savers in Croatia from public funds.

Slovenia claims that NLB, established by constitutional law in 1994, is not the universal legal successor of the “old” Ljubljanska Bank, nor of its former branch in Zagreb, and that the issue of debts and claims should be resolved within the framework of negotiations on the succession of SFRY.

In Ljubljana, on the occasion of the special law coming into force, they assert that the fact that judicial or forced collections of debts from old transferred savings will be compensated to the bank and its owners from the succession fund or from the budget does not mean that Slovenia recognizes NLB’s responsibility for the transferred foreign currency savings, as NLB has still been ordered to appeal all Croatian court rulings against it.

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It is estimated that the total value of the claims of Privredna Banka Zagreb and Zagrebačka Banka against NLB is 172.2 million euros, but due to the lengthy proceedings, the accrued interest already exceeds the principal amount.