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Nova KBM’s comment on its credit rating downgrade by Fitch | NKBM

Nova KBM's credit rating downgrade by Fitch was expected given the Slovenia’s sovereign credit rating downgrade by two notches earlier this year (27 January), and considering the methodology used by the rating agency, as well as the fact that the Bank is in need of fresh capital to implement its development plans, which has already been publicly announced by the Bank. It should be pointed out in this regard that the capital raising activities are already under way.

Nova KBM’s comment on its credit rating downgrade by Fitch

5 April 2013
OBVESTILA
Nova KBM's credit rating downgrade by Fitch was expected given the Slovenia’s sovereign credit rating downgrade by two notches earlier this year (27 January), and considering the methodology used by the rating agency, as well as the fact that the Bank is in need of fresh capital to implement its development plans, which has already been publicly announced by the Bank. It should be pointed out in this regard that the capital raising activities are already under way.
 

Nova KBM is a financially safe and sound institution with strong liquidity position. It meets all the regulatory capital requirements. The ratings assigned to the Bank have neither an effect on its day-to-day operations nor on the safety of its customer deposits. No new requirements have been imposed on the Bank as a result of its credit rating downgrade. Also, the credit rating downgrade will have no effect on the volume of funding raised by the Bank in the international financial markets, since most of these funds have already been refinanced by customer deposits. The Bank has sufficient funds available to finance the needs of its customers. 


By implementing certain measures over the next couple of months, including raising of fresh capital, the Bank plans to meet the EBA's recommended capital adequacy ratio. The most important measures are as follows: restructuring of both the Bank and the Group; divestments of certain non-core assets; 'cleaning' of the loan portfolio; active management of bad loans; cost reduction; and improvement of financial performance and return on equity. It needs to be emphasised that, for 2012, the Bank reported a profit before provisions and impairment losses.


Rating agencies also assess the willingness of bank owners to provide support in case of need. The implementation of measures and development priorities of the Bank strongly depends on the decisions of the government that will accelerate the rehabilitation of the Slovene financial system. Any measure taken with the aim of consolidating the state budget and strengthening the economy will have a positive effect on the rating of state-owned banks.