In particular you quote a Standard & Poor’s report that said: “State ownership has limited the banking sector’s restructuring and modernisation momentum and, given the dominance of NLB [Nova Ljubljanska Banka] and NKBM [Nova Kreditna Banka Maribor], potentially distorts the competitive environment.
“It also contributes to the slow adaptation to change, moderate returns and unfavourable cost structure. Conversely, this attitude has shielded the two largest players from greater competitive pressures felt elsewhere in Europe and provides a level of government support that has been replaced by foreign shareholders in other systems.”
In responding to these comments I would like to point out that Standard & Poor’s does not have rating coverage of any bank in Slovenia, and this is reflected in its obvious misunderstanding of the Slovenian market. Both Moody’s and Fitch have ratings on several banks in Slovenia and consequently offer a more realistic insight into the market.
Competition is very much alive and well in Slovenian banking, to such an extent that customers are availing themselves of pricing offers for loans and deposits that are in many cases far more favourable than in many other EU countries.
Recognition of a very competitive market is reflected in Moody’s November 2005 Rating Report of NLB, which states: “Slovenia’s fairly stable banking system has attracted the attention of European banks, which have invested substantial capital in this market. This increase in foreign bank involvement has drastically improved Slovenian banks’ expertise and know-how in the market, and has led to more sophisticated banking products and services.”
It is simply not true to say that Slovenian banks are falling behind in technology. At NLB more than 86% of all our retail customers’ transactions are on automated modern distribution channels, including internet banking, mobile banking, telephone banking and electronic banking.
In addition, 100% of our current account customers have debit cards that are used in almost every retail outlet in Slovenia for cashless payment transactions.
We would like to emphasise that we are operating in a very competitive and open market. Our customers extensively use the modern distribution channels provided and in this area we can favourably compare with any other European country.
Additionally, our bank has recorded increased profits for the past 12 years. For these reasons we have some difficulty in agreeing that “progress is slow on modernisation” in our banking sector.
David Buckley General manager, retail distribution Nova Ljubljanska Banka.
