Business News

Banks Return to Loss in July

Ljubljana, 18 September (STA) - Earnings of Slovenian banks returned to negative territory in July due to mounting write-downs and provisions from bad loans, central bank Banka Slovenije said on Tuesday.

After reporting total pre-tax profits of EUR 17m for the first half of the year, the banking sector made a pre-tax loss of EUR 4m through seven months, according to Banka Slovenije.

Struggles with bad loans, which are generating significant costs of impairments and provisions, continue to affect earnings of the Slovenian banking sector.

In its monthly report on the state of the banking sector, the central bank also points to a further drop in total assets of the sector as a result of the repayment of debt taken out abroad.

Total assets fell by EUR 1.2bn or 2.1% to EUR 48.8bn in the first six months of the year. The drop was influenced heavily by Slovenia's biggest bank, NLB, repaying the state-guaranteed bonds it issued in 2009.

Banka Slovenije also finds in its report that the Slovenian banking sector managed to increase gross revenues in the first six months on the back of non-interest revenues, but continued to see a decline in crediting activity.

Expensive foreign financing continues to affect crediting, with loans to the non-banking sector dropping by 5.8% in July.

The report also says that growth in household savings has slowed, amounting to 0.5% in July.

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