Business News

Financial Market Getting Back on Feet, Conference Told

Ljubljana, 14 April (STA) - The Slovenian financial market is slowly getting back on its feet following the delayed effects of the economic crisis that has left visible scars, a round table held on the first day of the Kapital 2010 financial fair was told. According to the participants, financial institutions are putting security and stability first.

Managing developments given the size of the Slovenian market is one of the major challenges of financial firms, said chairman of Slovenia's second-largest bank, NKBM, Matjaz Kovacic. He said that banks cannot rely solely on the domestic market if they want to grow.

This view was echoed by boss of Slovenia's top insurer, Zavarovalnica Triglav, Matjaz Rakovec, who said Slovenia should tap into its comparative advantages in SE Europe. He believes that the market will be dominated by consolidation in the coming years.

However, chairman of financial group KD Group Drasko Veselinovic warned that write-downs on SE European markets have resulted in losses for many financial institutions. As a result, KD Group will withdraw from markets such as Romania and Ukraine and continue to operate only in promising markets.

Finance Minister Franc Krizanic told the conference that Slovenia can be competitive in terms of finance because of its small size and membership of the eurozone. He said the country still had reserves in cross-border cooperation involving financial firms.

Krizanic ruled out that Slovenia could find itself in a similar situation as Greece. But he warned that it would have to step up oversight as the number of foreign financial institutions increases.

Meanwhile, chairman of Unicredit banka Slovenija France Arhar believes that Slovenia will need to attract more strategic investors from abroad. To do this it will have to strengthen corporate governance.

Krizanic believes that further improvement in the state of the financial market will taken place in the coming months. He said that the government was drafting a EUR 1bn guarantee scheme for investments.

However, Veselinovic warned that the credit crunch had not disappeared, pointing out that this was due to a lack of tangible projects and investments. This was echoed by Arhar.

The two-day fair featuring more than 80 financial firms will see a round table meeting on the crisis in the construction sector on Thursday.

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