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DatabankAugust 20 2021

Steadfast government support behind loan growth at Slovenian banks

Gross total loans picked up at leading lenders last year while NPLs dipped.
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Loan growth at leading Slovenian banks picked up last year in spite of the Covid-19 pandemic, on the back of supportive government fiscal policy.

At the country’s largest bank, Nova Ljubljanska Banka (NLB), gross total loans increased 39% year-on-year to $12.5bn in 2020, while rival lender Nova Kreditna Banka Maribor (NKBM) saw an 81% rise to $5.8bn, according to The Banker Database.

Fiscal support of about 6% of gross domestic product in 2020 and 4% this year has helped to preserve the purchasing power of households and the productive capacity of the economy, which has supported Slovenia’s banks.

“Very limited increases in unemployment have contained risks to banks’ mortgage and, to an even greater extent, consumer loan books, which banks had expanded rapidly over the past years,” according to Gabriel Zwicklhuber, an analyst at S&P Global.

The government’s support measures have so far prevented a rise in non-performing loans (NPLs), but the end of the mandatory loan moratorium in April and a gradual phase-out of government support measures may test asset quality, S&P notes.

The NPL ratio at NLB fell from 4.6% to 4.5%, while it also dropped from 4.3% to 2.8% at NKBM and from 3.1% to 2.6% at Intesa Sanpaolo Bank Slovenia, according to The Banker Database. SKB Banka, on the other hand, saw its NPL ratio rise from 1.8% to 2.9%.

Trends identified using The Banker Database, an online database providing comprehensive financial data and insight for 4000 of the world's leading banks in 190 countries. Contact us. 

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