UPDATE 1-Slovenian Central Bank hails record household deposits

(Adds bank profit figures)

LJUBLJANA, Feb 14 (Reuters) - Slovenia’s central bank governor said on Wednesday that household deposits in local banks were at a record high and that this showed confidence in the Slovenian banking sector five years after it narrowly avoided an international bailout.

The central bank later said local banks ended 2017 with a net profit of 423 million euros ($519.61 million) versus 332 million a year ago, partly due to lower provisions for bad loans. Balance sheet assets increased by 2.4 percent to 37.9 billion euros.

“Today households hold over 17 billion euros of their own money in Slovenian banks which is a record value and a reflection of confidence,” Governor Bostjan Jazbec told a conference on the EU Banking Union.

Household deposits reached 17.5 billion euros in December, and were 5.6 percent higher than a year ago, central bank data showed.

Jazbec, who also sits on the ECB governing board, urged the European Banking Union to form a European system for deposit guarantees, saying this would help boost confidence in banks.

In 2013 the Slovenian government had to pour more than 3 billion euros into local banks to prevent a collapse. At the time about 20 percent of all loans were bad loans. Since then banks have reduced this to 6 percent.

The government controls about 44 percent of the banking sector while most of the remaining banks are owned by foreign banks and investors, including French bank Societe Generale , Italy’s Unicredit and Russia’s Sberbank . ($1 = 0.8141 euros) (Reporting by Marja Novak; Editing by Raissa Kasolowsky and Jon Boyle)