Research Update: Nova Ljubljanska Banka Affirmed At 'BBB/A-2' After Intention To Acquire Addiko Bank; Outlook Stable

On May 9, 2024, Slovenia's largest bank, Nova Ljubljanska Banka (NLB), presented its Strategy 2030 vision which outlines core market growth plans and the ambition to double the bank's balance sheet by 2030. Days later, NLB announced its intention to acquire Austria-based Addiko Bank to expand in its home region and enter Croatia as a new market. The acquisition is pending acceptance by Addiko's shareholders and approval by relevant authorities where Addiko operates. While we note execution risks from a potential acquisition over the next 12-24 months, we consider NLB's good track record of integrating newly acquired banks as well as its sufficiently high capital buffers and solid earnings capacity. Even without the acquisition, we expect NLB to further build

...- On May 9, 2024, Slovenia's largest bank, Nova Ljubljanska Banka (NLB), presented its Strategy 2030 vision which outlines core market growth plans and the ambition to double the bank's balance sheet by 2030. - Days later, NLB announced its intention to acquire Austria-based Addiko Bank to expand in its home region and enter Croatia as a new market. The acquisition is pending acceptance by Addiko's shareholders and approval by relevant authorities where Addiko operates. - While we note execution risks from a potential acquisition over the next 12-24 months, we consider NLB's good track record of integrating newly acquired banks as well as its sufficiently high capital buffers and solid earnings capacity. - Even without the acquisition, we expect NLB to further build its market leading position in Slovenia and expand in its extended home market. - We therefore affirmed our long- and short-term issuer credit ratings on NLB at '###/A-2'. - The outlook remains stable, reflecting our expectation...

Research Update