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By Marja Novak
LJUBLJANA, April 16 Slovenia's banks are
expected to pass this year's European Union-wide stress tests,
Bank of Slovenia vice-governor Stanislava Zadravec Caprirolo
told a banking conference on Wednesday.
The central European country narrowly avoided an
international bailout in December by pumping 3.3 billion euros
($4.6 billion) into its mostly state-owned banks, but Zadravec
said the economic forecast on which the stress tests will be
based have improved since external tests were conducted last
year in line with EU demands.
"The results (of the EU stress tests) should confirm that
step (bank overhaul) was completed successfully," the central
bank official said.
The European stress tests will be made in three state-owned
Slovenian banks - Nova Ljubljanska Banka (NLB), Nova KBM (NKBM)
and the state export and development bank SID Banka.
Last year's tests revealed that Slovenian banks would need
4.8 billion euros of extra capital in an adverse scenario. Since
then, however, most banks have been recapitalised and most bad
loans of the three largest lenders - NLB, NKBM and Abanka Vipa -
are being transferred to the state-owned bad bank.
The Bank of Slovenia last week said it expected the
country's economy to expand by 0.6 percent this year after two
years of recession, boosted by a rise of exports. That was a
significant improvement on its forecast in October for a 0.7
percent decline this year.
Slovenia is also planning a bank privatisation programme to
boost budget income and improve management in a sector that has
piled up a large amount of bad debt through reckless lending.
Finance Minister Uros Cufer said on Wednesday that the
government plans to sell the country's second-largest bank NKMB
by the end of this year.
($1 = 0.7234 Euros)
(Editing by David Goodman)