Slovenian Banks Reported Highest Profits Since 2007 in 2018

By , 08 Mar 2019, 14:30 PM Business
Slovenian Banks Reported Highest Profits Since 2007 in 2018 - 3dman_eu, public domain

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STA, 7 March 2019 - Slovenian banks recorded a cumulative net profit of just over EUR 496m in 2018, the highest since the pre-crisis year 2007 and an increase of almost 17% over the year before on the back of robust growth of non-interest revenue.

Whereas net interest revenue rose by just 3% to EUR 672m due to persistently low interest rates, non-interest revenue surged by over 14% to EUR 482m, shows a central bank report released on Thursday.

The figure confirms earlier findings that banks have been increasing service fees to offset low interest rates.

The sector also profited from the cancellation of provisions for non-performing loans, though that contributed only EUR 48m to the bottom line, a tenth more than in the year before.

Operating costs increased only marginally, by 0.6% to EUR 700m.

Total assets increased by 2.2% to EUR 38.78bn, in what is the second consecutive annual increase.

Non-banking deposits were up 5.3% to almost EUR 30bn, mostly due to a EUR 1.2bn increase in household deposits.

Loans to the non-banking sector grew at a rate of 3.3% on the back of robust lending to households, which now account for a quarter of total outstanding loans.

Asset quality improved last year as banks reduced exposure to non-performing loans to 4% from 6% measured by the broad definition of the European Banking Authority.

Despite the rapid improvement, the share of non-performing loans to the corporate sector remains high, at 8.4%. This is however a 4.5-point improvement on the year before.

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