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Nova Ljubljanska banka, KBC ponder joint sale of Slovenian life insurer

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Nova Ljubljanska banka, KBC ponder joint sale of Slovenian life insurer

Nova Ljubljanska banka d.d. and KBC Group NV are exploring opportunities to sell Slovenia's second-largest life insurer, NLB Vita d.d., to a single potential buyer, the Slovenian lender said Aug. 20.

The divestment of NLB Vita is part of an additional commitment put forward by the European Commission for approving a delay in the partial privatization of Nova Ljubljanska banka. Slovenia was originally supposed to launch a two-stage sale of a 75% stake in the bank in 2017 and complete the process by the end of 2018 in exchange for the EU's approval of 2013 state aid to the bank.

However, the European Commission agreed in August 2018 to extend the privatization process until the end of 2019. The privatization was completed in June 2019, when the Slovenian government sold 10% of NLB after selling 65% in November 2018 via an initial public offering.

"Given that this additional commitment is still pending despite successful completion of the first phase of the bank's privatization process in November last year, both owners, NLB and KBC, are looking into the possibilities to jointly divest their stakes in life insurer NLB Vita, while the Slovenian market is noncore to KBC," the Slovenian bank said.

NLB and KBC unit KBC Verzekeringen NV each have a 50% stake in NLB Vita. NLB, in which the Slovenian government holds a stake of 25% plus 1 share after the privatization, said it intends to continue collaboration with NLB Vita after the potential divestment by selling the insurer's products across its distribution network and online.