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.