Business News

Banks End H1 with Profits, Deterioration Expected in H2, Central Bank Says

Ljubljana, 04 September (STA) - Slovenian banks ended the first half of 2012 with EUR 17m in pre-tax profits after impairments and provisions, the central bank said on Tuesday. Banka Slovenije expects the results to deteriorate in the second half due to a continuous decrease in net interest revenues.

According to a report discussed by the central bank council, costs related to impairments and provisions increased by 43% compared to the same period last year.

Total assets of Slovenian banks slid EUR 310m to EUR 48.8bn in June, down to the 2011 year-end level. Gross bank revenues grew by about 10% compared to the same period last year due to a one-off increase of net non-interest revenues, the bank said.

The central bank council also debated the current economic and financial movements, stressing that the economic condition in Slovenia deteriorated in the second quarter. In addition to low domestic demand, the situation in the eurozone deteriorated further, the bank said.

Fiscal conditions have deteriorated to a level that demands immediate and credible balancing of public finance, Banka Slovenije said.

"After failed reform measures last year the state and the social partners must act to regain trust and ensure a long-term sustainability of public finance by taking a coordinated approach to the necessary reforms," the central bank said.

Furthermore, additional short-term measures will be required, the bank added, pointing to measure for the revenue-side of the budget, and to a lesser extent, measures with generally stronger negative short-term effects on the economic activity, such as cutting the state's intermediate consumption or investment.

Cutting the deficit must also base on further adjustments of pay in the public sector and of social transfers where conditions permit.

On the other hand, far-reaching layoffs in the public sector could have unfavourable effects on the performance of the public sector and on unemployment, and could have small net effects on the balancing of the budget, the central bank added.

You might be also interested in:


We are here to help you.