Bloomberg News

Slovenia's Nova Kreditna 2011 Loss Widens to $106 Million

April 17, 2012

Nova Kreditna Banka Maribor (KBMR) d.d., Slovenia’s second-biggest lender by assets, said its first loss since a 2007 share sale was larger than previously estimated as bad loan provisions soared.

The bank’s net loss last year was 81 million euros ($106 million) compared with a March 1 estimate of 53.6 million euros, the Maribor-based bank said in an e-mailed statement today. Provisions for bad loans surged to 175.4 million euros, or 21 percent more than the earlier estimate.

Nova Kreditna and its larger rival Nova Ljubljanska Banka d.d. were forced to put aside record reserves for bad loans after the construction industry plunged following the 2009 recession. Lenders in Slovenia, which rely on European Central Bank liquidity, will probably incur further losses this year as the economy enters another recession, the jobless rate rises and the government embarks on austerity measures, the central bank said last month.

Banks in Slovenia need to raise capital and clean their balance sheets after the country’s financial system was “strongly” hit by the financial crisis, the International Monetary Fund said in a report yesterday. Slovenia’s export- driven economy will probably shrink 1 percent this year, the IMF said today, after contracting 0.2 percent in 2011.

To contact the reporter on this story: Boris Cerni in Ljubljana at bcerni@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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