Slovenia to transfer 3.3bn euros of bad loans to bad bank

LJUBLJANA: Slovenia plans to transfer 3.3 billion euros of bad loans held by its three largest banks, all state-controlled, to a newly established bad bank, a document on the government's reform plans, released on Friday, showed.

In return the three banks combined will receive state-guaranteed bonds worth 1.1 billion euros in total.

The three banks, NLB, Nova KBM and Abanka Vipa hold the lion's share of 7 billion euros of bad loans that are choking the euro zone member's banking sector and placing it at a heart of speculation that it might need a bailout within a year.

The bad bank is due to become operational in June.