The year 2001 was a year of dynamic change for Nova Ljubljanska banka d.d., Ljubljana.
In July 2001 the mandate for the Supervisory Board, that with the Management Board successfully steered NLB in the period 1997 - 2001, ended. A new Board was appointed with the following members: Rudolf Gabrovec, Zvone Ivanušič, Dr. Bogomir Kovač, Marjan Kramar, M.Sc. Jože Lenič, M.Sc. Boris Škapin, Uroš Slavinec, Dr. Metka Tekavčičand M.Sc. Igor Kušar. The new Board continued the work of its predecessor focusing its attention on issues identified in the annual business plan. The Supervisory Board paid special attention to the business informatics project as the infrastructure backbone of the Bank, expected to be operational by the end of 2002.
The start of the privatisation in 2001 is among key strategic moves. After a long period of preparation and search for an optimal program the implementation started in May of 2001. As the majority shareholder the Republic of Slovenia, by international tender, invited key investors to buy its 34 per cent of shares of Nova Ljubljanska banka d.d., Ljubljana. Key investors were defined as financial institutions able to provide effective business partnership within the framework of NLB's long term developmental strategy.
NLB undertook the demanding work of privatisation. Preparatory activities and interactions with potential key investors and in financial due diligence required substantial additional effort by the Management as well as Senior Bank Staff. It is expected that these efforts will bear fruit in the second half of 2002, when with the closure of privatisation projects an appropriate shareholder structure will be achieved. Around one third of shares shall be owned by key shareholder, one third by institutional - majority domestic - investors and one third shall remain either in direct or indirect state ownership. I am confident that such a change in ownership structure will further improve the corporate governance and efficiency of the Bank, which will with a key business partner also further increase financial strength and expand its offer on bank-assurance products.
Linked with privatisation the most important business change was the
integration of Dolenjska banka, Banka Velenje and Pomurska banka into
NLB. This enabled both NLB and the Group to further strengthen their core
competitive advantages in the domestic market. The integration project
was not only important for consolidation of market share, but also for
the expected synergies resulting from the integration. The Bank is now
faced with the second, more complex part of the integration project: optimisation
of the base costs, including rationalisation of labour costs.
NLB intends to further strengthen its leading position in the domestic market where we expect stronger competition compared to previous years. There is no doubt that NLB will be able to further increase and/or defend its market share only with new, competitive banking products and continued focus on customer needs. Lastly, NLB will need to further improve internal efficiency in order to improve cost parameters to the level of international competition.
Given its share in the domestic market there will be a stronger emphasis on the growth in the markets of Southeast Europe, especially in the markets of countries of the former Yugoslav republics, in the future. Subsidiaries in Western Europe will remain important instruments for future growth, especially in business activities in the markets of the former Yugoslav republics. A strategic decision regarding our New York subsidiary, either in defining its form of a market niche player or in the form of reduction of its business activity, has been discussed widely and will be formalized this year.
I expect that the period of important change will continue in 2002. Upon
consolidation of ownership structure the Bank will, in the interest of
all especially small shareholders, be publicly quoted. Reorientation in
business philosophy toward the creation of shareholder value will enable
further introduction of performance related rewards for Senior Management.
These mechanisms will be closely related with the basic measure of business
efficiency - increase in earnings per share.