Nova Kreditna Banka Maribor (Nova KBM) has secured key regulatory nod regarding its previously announced acquisition of Abanka bank.

The Slovenian lender received green light from local anti-trust body the Slovenian Competition Protection Agency (AVK).

The approval will enable Nova KBM to advance with the acquisition, which still requires additional regulatory nods.

In a statement, Nova KBM president of the management board John Denhof welcomed the AVK decision.

He said: “It is an incredible opportunity for Nova KBM and Abanka to create a stronger combined bank, which is positive for the Slovenia’s economy.”

Abanka acquisition: Background

In June this year, Nova KBM signed an agreement to acquire domestic rival Abanka. The deal was said to be valued at €444m ($501m).

Nova KBM will purchase 100% stake in Abanka from Slovenian Sovereign Holding (SSH), a government body. The government is pursuing the divestment of Abanka as part of its efforts to privatise the banking sector.

Abanka is the third largest bank in Slovenia by total assets. On the other hand, Nova KBM is the second largest bank in the country.

The combined bank is estimated to hold a market share of 22.5%.

Till the acquisition finalises, both the banks will continue to operate as independent legal entities.

“Nova KBM continues to invest its efforts in being the most accessible bank in Slovenia, its footprint will remain strong and operations present across all of its regions,” a Nova KBM statement added.