LJUBLJANA, Sept 13 Slovenia expects up to 4 billion euros ($5.2 billion) of state guarantees will be needed to compensate for the bad loans of state banks which are due to be taken over by a newly established state agency, Finance Minister Janez Sustersic said on Thursday.
The rising amount of bad debts in the country's banking sector is at the heart of market speculation that Slovenia could become the sixth euro zone member in need of an international bailout, which the government is struggling to avoid by reforms.
Central bank governor Marko Kranjec said on Tuesday all banks in the country were solvent, but added that the situation was worsening because of the weak economic backdrop.
At the end of July, Slovenian banks had in total some 6.4 billion euros of non-perfoming loans, up 55 percent compared with the same period in 2011.
Most bad loans were held by the three largest banks, Nova Ljubljanska Banka, Nova KBM and Abanka Vipa , which are all majority or partially state owned and all needed or still need capital injections this year to meet tougher European capital requirements. ($1 = 0.7759 euros) (Reporting by Marja Novak; Editing by David Holmes)