Slovenian banks Abanka and Banka Celje have entered into a merger deal that will be completed in the last quarter, creating the second largest bank in the country.
The deal has the stamp of approval from the Slovenian government and aims to consolidate the local banking industry in hopes of attracting new investment. It also aims to strengthen the banks before putting them up for sale in the coming years.
Once the merger is completed, all property of Banka Celje, including its rights and obligations, will be transferred to Abanka.
The newly formed entity, Abanka d.d., will focus primarily on retail customers and small and medium-sized companies. Slovenia plans to sell off the new bank by July 2019.
In a filing to the Ljubljana bourse, Abanka said that the transaction is subject to approval of the shareholders of both the banks and will be legally effective after getting the required approvals from the country’s national bank and competition protection agency.
While the country will sell most of the other state-owned commercial banks gradually, the government has decided to retain a majority share in the country’s largest bank Nova Ljubljanska Banka.
Its second largest bank, Nova KBM will be sold in the next few weeks.
Last year the government pumped in more than €3bn into the country’s banks to prevent them from collapsing under bad loans, reported Reuters. The government is still reluctant to go ahead with sale of major banks and companies and continues to control half of the country’s economy.