With an economy badly impacted by the eurozone crisis and severe troubles in the construction sector, Slovenia’s banks have been struggling. Indeed the latest International Monetary Fund (IMF) country report in May criticises the banks for being thinly capitalised, with deteriorating profits and asset quality. But as recovery gets under way a different story may emerge.
In The Banker’s Top 200 EU banks published in September, the highest bank from a new entrant country was Slovenia’s Nova Ljubljanska Banka (NLB), ranked at 116 with Tier 1 capital of $1.33bn. Other Slovenian banks to do well in the ranking were Abanka Vipa at 159, Gorenjska Banka at 169, Nova Kreditna Banka Maribor (NKBM) at 175 and Banka Celje at 188. For a small country, Slovenia’s banking sector has the potential to punch above its weight but first it needs to solve its crisis-related problems. A further sign that this outcome is some way off came in September when Fitch downgraded all seven domestically owned Slovenian banks which it rates along with the sovereign’s debt.
