Two of Slovenia's largest banks, namely NLB and NKBM are planning to introduce capital hikes worth a combined total of Eur767 billion or US$1 billion. This was an announcement made by both state controlled banks.

The banks have absorbed the major portions of the Eur7 billion worth of bad loans that have been putting a damper on the banking system as well as pushing the country to become the latest candidate in the Eurozone to seek aid through a bailout. Last Thursday, the government had promied to sell off fifteen different state companies as well as raise the value added tax in efforts to avoid seeking international financial assistance.

For its part, NLB would be issuing new shares worth Eur367 million while NKBM plans to issue about Eur400 million. Of the two, NKBM is set to be sold off on the auction block within the year.

The government had pledged that it would infuse capital into the banks through an injection of Eur400 million by the end of July. The plan includes a transfer of the bad loans to a recipient bank by June to alleviate the credit crunch and lead the bank to the road to privatization.