Drawing a sigh of relief from its partners in the euro zone, Slovenia announced last week it would rescue its sinking banks alone, by cleaning up their bad loans and injecting fresh capital, at a cost of 4.8 billion euros ($6.6 billion).

As part of the plan, bad loans will be transferred to the state-run DUTB, a process that should be completed by May. The banks will be paid in two- and three-year bonds that will allow them to access cash and fund new business.

"The transfer of non-performing loans from the two banks is set for December 20," the DUTB said in a statement on Wednesday. "Then we will know the nominal value of the first batch of loans". DUTB said talks to hammer out final details were still under way between the bank and the two biggest commercial lenders, NLB and NKBM.

Earlier on Wednesday, the European Union state aid regulator approved emergency aid and restructuring plans submitted by five Slovenian banks. It approved restructuring plans for NLB and NKBM and aid for winding down Factor Banka and Probanka. It also gave a temporary go-ahead to rescue aid for the third-biggest bank, Abanka Vipa, but said final clearance would depend on a restructuring plan to be submitted by Slovenia in the coming months.

The 4.8 billion euro bill was arrived at after a lengthy review of the eight biggest banks by external auditors.

Reuters