STA, 21 February 2020 - Slovenian banks generated a combined pre-tax profit of EUR 597.4 million last year, which the central bank says is the highest pre-tax profit on record. The figure is up 12.5% from the year before.
Profit after tax rose by 8% last year to EUR 534.9 million, while the banks increased their total assets by 6.3% to EUR 41.2 billion, the latest report by the central bank shows.
Net interest revenue rose by 1.6% to EUR 682.7 million and non-interest revenue increased by 19.1% to EUR 573.4 million.
The banks' bottom line was positively affected by net release of impairments and provisions. The pre-tax return on equity was 12.3%. Costs rose by 5.6% to EUR 706.8 million.
The growth in lending to the non-banking sector slowed down in December to 5.8% year-on-year, mainly because of a slowdown in corporate loans.
"The volume of loans to companies decreased by EUR 262 million in December, the most since 2016, and is partly attributable to the maturity of major loans agreed mid-last year," Banka Slovenije said.
Year-on-year growth in housing loans stayed at 5.8% in December. "After two distinctively above-average months the net monthly growth in those loans, at EUR 23 million, was lower than the average for 2019, at EUR 29 million."
The growth in consumer loans, at an average rate of 11.7% in 2019, slowed down to 8.9% year-on-year in December following the central bank's restrictions on consumer lending.
"An increase in the volume of consumer loans in October was followed by a decrease in November and December by EUR 15 million and EUR 21 million, respectively," says the report.
In the last quarter of the year, housing loans increased by EUR 105 million and consumer loans rose by EUR 14 million, which compares to EUR 64 million and EUR 69 million, respectively in 2018.
"We assess that the changed trends in retail lending were partly affected by the implementation of the decision on macro-prudential restrictions on retail lending in November," said the central bank.
However, it added that it was premature to draw any conclusions on the effects of the measure, because it was necessary to take into consideration non-typical conduct by banks and borrowers in anticipation of the measure, and after its implementation, delays in loan drawing and the effect of holidays and season.
Banks also continued to reduce exposure to non-performing loans last year; these decreased by EUR 128 million in December to one billion euro, and their proportion in total exposure to 2.2%.
The non-banking sector's deposits in 2019 increased by 7.2%, the annual growth since 2014. In December, household loans increased by 8.7% year-on-year, which compares to 11-month average 7.5%
The growth in corporate deposits have been slowing down since mid-2018; in December it decreased by 0.4% year-on-year.