Slovenian Financial Industry Woes Worsen on Rising Bad Loans

Slovenia’s financial industry woes worsened in October as bad loans held by euro-region banks continued to climb, the government economic institute said.

Bad loans at banks rose to 6.7 billion euros ($8.8 billion), or to 13.6 percent of all loans at the end of September, the institute said. Lenders continue to set aside reserves to cover non-performing loans with the amount in the first 10 months of 2012 increasing by a fifth from a year earlier, it said.

Slovenian banks like Nova Ljubljanska Banka d.d. and Nova Kreditna Banka (KBMR) Maribor d.d. are seeing their bad loans surge as the export-driven economy slides into its second recession in three years. The three biggest banks in the Adriatic nation need fresh funding to bolster their capital.

“Companies and non-financial institutions continued to repay loans at domestic banks while credit given to households remains at a very low level.” the Ljubljana-based institute said in an e-mailed statement today.

NLB, which is set to report a loss for a fourth consecutive year, according to Chief Executive Officer Janko Medja, wants to raise 375 million euros by year’s end while Abanka Vipa d.d. is seeking 90 million euros in a share sale.

To contact the reporter on this story: Boris Cerni in Ljubljana at bcerni@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.