Slovenia's largest bank, state-owned NLB, said Monday that losses widened in 2012 and that it needs 400 million euros ($534 million) in fresh capital to meet European regulatory requirements.
Nova Ljubljanska Banka (NLB) said that bad loans pushed it to a loss of 273.5 million euros in 2012 compared with a loss of 239 million euros in 2011 and that it expects to be in the red in 2013 too.
"The situation in the Slovenian environment and in the bank remain very serious," chief executive Janko Mevlja told journalists.
Problems at Slovenia's banks, struggling under a mountain of bad debt, have raised speculation that the former Yugoslav republic, once a model newcomer to the European Union and the eurozone, may need a bailout.
Mevlja said a 400-million-euro capital hike was needed this year in order to raise the bank's core tier one capital ratio from the current 8.7 percent to 9.0 percent as required by the European Bank Authority.
The Slovenian state has held an 86-percent stake in NLB since December when it acquired a 22-percent-stake from the second-largest owner, Belgian insurance and banking group KBC. The stake will rise to 90 percent later this year.
Slovenia's parliament approved in October setting up a bad bank to take bad debts off stricken lenders' balance sheets.
Prime Minister Janez Jansa is meanwhile struggling to stay in office at the head of a minority government.