NLB Bank Posts Fourth Annual Loss as Bad Loans Surge
Nova Ljubljanska Banka d.d., Slovenia’s biggest lender, posted a loss for a fourth consecutive year as bad-loan provisions surged.
Net loss was 275 million euros ($367 million) in 2012 as bad-loan provisions rose to 511 million euros, Chief Executive Officer Janko Medja said at a news conference in Ljubljana today. The bank’s net loss was 239 million euros in 2011.
“The economy is in very bad shape,” Chief Executive Officer Janko Medja, appointed to the top post in September, told reporters today. “Bad loan provisions were the main reason for our loss last year.”
The Slovenian banking industry, which last year had a combined pretax loss of 606 million euros, is grappling with surging bad loans as a second recession in three years pushes more companies into bankruptcy, forcing lenders to set aside record reserves. Slovenia may ask for international assistance if the euro-region nation fails to fully implement the so-called bad bank plan to recapitalize the ailing industry, former Finance Minister Janez Sustersic said Feb. 14.
The Adriatic nation plunged into a political turmoil last month over corruption allegations against Prime Minister Janez Jansa, prompting two coalition partners to leave the ruling group. Jansa vowed to continue with a minority government.
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