LJUBLJANA May 14 Bad loans in Slovenian banks,
which almost forced the country to ask for outside help last
year, are still rising but at a slower pace than they have for
the past four years, the government's macroeconomic institute
said on Wednesday.
In December, the government injected some 3.3 billion euros
of its own funds into local banks that were weighed down by
toxic loans. The funding enabled the country to narrowly avoid
an international bailout.
"The formation of new provisions for bad loans remains at a
low level. It reached only 30 million euros in the first two
months of this year ... and was lower than in the past four
years," the institute said in its monthly report.
Bad loans at local banks amounted to 5.8 billion euros, or
13.9 percent of all loans, at the end of February, it said.
The bad loans had stood at some 9 billion euros before the
overhaul in December. About 3.5 billion euros of those loans
from the two largest banks - Nova Ljubljanska Banka and Nova KBM
- have already been transferred to a state "bad bank".
Bad loans worth some 543 million euros from the country's
third-largest bank, Abanka Vipa, are due to be transferred to
the bad bank in the coming months.
Unlike most other ex-communist countries in eastern Europe,
Slovenia has refused to sell its largest banks, so the
government still controls most of the local banking sector,
which accumulated a large amount of bad loans through years of
The government hopes to privatise NKBM by the end of next
(Reporting By Marja Novak; Editing by Zoran Radosavljevic and