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D&B Concerned About Slovenian Banks

Ljubljana, 04 November (STA) - Dun&Bradstreet kept Slovenia's rating stable at DB2c in November, the best in the region. However the rating firm is concerned about the situation in Slovenian banks, which could have a negative impact on domestic demand.

D&B notes that credit rating agency Moody's recently downgraded its ratings for Slovenia's three biggest banks, the NLB, the NKBM and Abanka.

Furthermore, there is uncertainty over future capitalisation at NLB and the government, the biggest owner, is unsure about the strategy.

D&B says the most likely option is for the government to contribute as much as necessary to increase its share to 50% plus one share, thus keeping the bank in state ownership.

Coupled with the economic outlook for the second half of the year, the consequences of the bank rating downgrades "will be felt throughout the economy" by making loans more expensive and harder to obtain, holding back domestic demand, D&B says.

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