LJUBLJANA, April 4 Slovenia's largest bank,
state-owned Nova Ljubljanska Banka (NLB), said it expected to
reduce its bad loans by the end of the year on account of
privatisation and improved economic performance in the country.
The bank, which received a capital injection of 1.6 billion
euros in December when Slovenia overhauled its banks and
narrowly avoided an international bailout, currently has a bad
loan rate of about 25 percent.
"Our estimate is that there are elements which confirm that
things are improving... and we expect to reduce bad loans by
some percentage points this year," CEO of NLB Janko Medja told
Reuters on the sidelines of a banking conference.
"Privatisations will bring in new liquidity which will be
distributed in the economy so companies will be able to reduce
debt which is what we are looking for," he added.
Last year the government earmarked 15 firms for
privatisation, recently selling two of them, while it this week
called for non-binding bids for the telecoms operator Telekom
which is the largest company on the list.
The government expects higher exports will lead to economic
growth of 0.5 percent this year after two consecutive years of
Bank of Slovenia Governor Bostjan Jazbec told the conference
that economic growth was of utmost importance for banks
struggling to get rid of bad loans.
"Without economic growth we will run only into more
problems," Jazbec said.
In an interview with a local newspaper last week he said
total bad loans in the Slovenian banks amounted to 11 billion
euros, which is about 31 percent of GDP.
The transfer of about 4.5 billion euros of those loans to
the state-owned bad bank is expected to be completed by the end
of April while banks themselves will have to deal with the
remaining bad loans.
($1 = 0.7291 Euros)
(Reporting by Marja Novak; Editing by Toby Chopra)