Bloomberg News

Slovenia Central Bank Urges Lenders to Fund Economy

July 03, 2012

Slovenia’s central bank urged lenders in the country, including Nova Ljubljanska Banka d.d. and Nova Kreditna Banka Maribor (KBMR) d.d., to accelerate funding of the economy or risk seeing companies seeking credit outside the country.

The central bank “expects banks to speed up lending to the credit-worthy companies, otherwise there is a danger that such companies will seek debt directly from abroad,” the Ljubljana- based Banka Slovenije said in an e-mailed statement today.

In May, lending to the non-banking sector of the economy shrank an annual 4.8 percent on declining loans to both companies and households, it said.

Slovenian banks, which rely on loans from the European Central Bank, are restricting credit to the economy due to limited wholesale funding and because they are setting aside record reserves to cover bad loans.

The country’s export-dependent economy is on the brink of its second recession in three years as austerity measures at home and in Europe damp demand.

Net interest income declined 8.1 percent in May from a year earlier while cost of asset writedowns increased by 27 percent in the same period, the central bank said. The banking industry had a total pretax loss of 45.7 million euros ($57.5 million) in the first five months of 2012, it said.

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


Steve Ballmer, Power Forward
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus