LJUBLJANA, June 24 Slovenian banks, rescued by
the government from crumbling under bad loans last December,
returned to profit in the first four months of the year thanks
mainly to higher interest rate income, the Bank of Slovenia said
The four-month pre-tax profit of 88 million euros compares
to a pre-tax loss of 41.5 million euros in the same period last
"This year the net interest rate income rose significantly
due to lower passive interest rates and lower indebtedness of
banks," the central bank said in a statement after its board
meeting on Tuesday.
Slovenia narrowly avoided an international bailout in
December by pumping some 3.3 billion euros in to local lenders,
most of them state-owned, to prevent them from sinking under bad
loans piled up through years of reckless lending.
Bank of Slovenia Governor Bostjan Jazbec said on Monday
local banks have enough capital at least until the start of
2016. But he warned that the government which will be formed
after the July 13 snap election will have to act fast to ensure
further financial stability.
"Favourable economic developments and public finance
stabilisation will be endangered in the case of prolonged
political uncertaintly and a failure to fulfil fiscal
consolidation obligations," the central bank said.
Slovenia hopes to cut the budget deficit to some 4.2 percent
of GDP this year from 14.7 percent last year, when the deficit
soared because of the bank recapitalisation.
Slovenia will hold an early election on July 13 after the
centre-left Prime Minister Alenka Bratusek resigned in May
because she lost the battle for the leadership of her Positive
Opinion polls suggest that the new centre-left SMC party,
led by law professor and political newcomer Miro Cerar, is
likely to win the most votes.
(Reporting By Marja Novak; Editing by Zoran Radosavljevic and