Fitch Ratings placed ratings of six largest Slovenian banks on its negative rating watch. The ratings agency cited rising concerns over the provision of support of the Slovenian authorities for the country's banking sector.

Putting the ratings of NLB, NKBM, Abanka Vipa, Gorenjska Banka, Banka Celje and Probanka under review, the ratings agency said it would review the ability and propensity of Slovenian as well as European authorities to provide support in case of need.

According to Fitch, the review will also take into consideration the banks' 2011 results and the progress with the recapitalisation of NLB, which is required by the European Banking Agency to meet a 9% consolidated core Tier 1 capital requirement.

Slovenia's biggest bank, NLB, made EUR 239m in group losses in 2011, mainly due to impairments and provisions. NLB chairman Božo Jašovič said last week the bank would need EUR 400m in fresh capital to meet the required Tier 1 capital threshold.

Separately, Fitch downgraded Abanka Vipa's viability rating to B from BB-. The ratings agency said the downgrade reflected further sharp deterioration in the bank's asset quality and capitalisation in the final quarter of 2011. Abanka's hybrid capital instrument has also been downgraded to CCC from B due to the agency's revised ratings criteria.

Abanka Vipa, Slovenia's third largest bank, posted a EUR 119m loss last year due to EUR 188m in impairments and provisions.