STA, 6 September 2019 - Slovenia's largest banking group, NLB saw its half-year-net profit fall by 10% year-on-year to EUR 94.3 million despite higher interest and non-interest income.
Profit before impairments and provisions was up 13% to EUR 116 million, according to the interim report released by the bank on the website of the Ljubljana Stock Exchange.
Total net operating income amounted to EUR 257.4 million, a 6% increase y/y. Net interest income rose by 5% to EUR 159 million, and net non-interest revenue increased by 8% to EUR 98.3 million.
Net interest income rose in all banks of the group as a result of loan volume growth and lower interest expenses. Subsidiary banks in SE Europe continued to perform well, contributing 38.4% to the group's profit before tax.
Net loans to customers rose by 3% year-on-year to EUR 7.28 billion, while deposits went up by 7% to EUR 10.75 billion. The growth was mainly due to retail deposits.
This year saw a gradual increase in new consumer and housing loans. The share of consumer loans in all gross loans rose from 26% in the first half of 2018 to 28% in the first half of 2019.
The group's total assets rose by 5% to EUR 13.16 billion. This is attributed mainly to the continuous inflow of retail deposits.
NLB also reports having continued with the trend of improved credit portfolio quality. The proportion of non-performing loans dropped to 6%, 2.3 percentage points down compared to a year ago.
The internationally comparable non-performing exposure ratio dropped by 1.7 percentage points to 4.1% in line with the European Banking Authority guidelines, which is very close to the mid-term target of 4%.
Total capital ratio for the NLB group at the end of June reached 16.5%.
"NLB Group is on a good path toward meeting its mid-term financial targets despite the increasingly challenging economic environment of low interest rates," the bank commented on the results.
The parent bank generated EUR 122.6 million in profit, which compares to EUR 103.3 million in the first half of last year.
The macroeconomic outlook suggests the countries where the group is present are likely to post growth rates of between 3% and 4%, if supported by loose monetary conditions, fiscal easing and solid domestic demand.
"Considering these circumstances and presented risk factors, in 2019 the Group aims to achieve a single
digit % increase of revenue and pre-provision profit with continued loan growth (in line with GDP
dynamics) and stable net interest margin," reads the release.
The results were reviewed by the bank's supervisory board today.
The board also gave a green light to establishing a new leasing company, as restrictions on leasing activities ceased to apply following the bank's completed privatisation earlier this year.
STA, 8 September 2019 - Ljubljanske Mlekarne, Slovenia's largest dairy, increased sales revenue by 0.6% last year to EUR 168.6 million, while net profit was up by 33.3% to EUR 6.7 million, according to the annual report filed with the AJPES agency for public records.
The dairy, which has been in the ownership the French Lactalis group through Croatia's Dukat since 2013, says it managed to reduce total costs by 1.4%.
While net profit was up by a third, operating profit increased by 15.9% to EUR 7.9 million.
Ljubljanske Mlekarne, which is the largest buyer and processor of raw milk in the country, is increasing the purchase of organic milk as demand outstrips supply.
For this purpose, the company made a deal last year with the Association of Organic Farmers that it will be purchasing five million litres of organic milk a year until the end of 2020.
STA, 8 September 2019 - Foreign companies accounted for 5.6% of all companies in Slovenia in 2017 but created over 27% of value added, roughly on a par with 2016.
These companies employed almost 26% of all workers, and allocated 39% of their expenses in Slovenia for R&D, the latest Statistics Office data shows.
A foreign company, or a foreign inward affiliate, is according to the statisticians an enterprise which is resident in Slovenia but controlled by an institutional unit outside Slovenia.
There were a total of 8,018 such companies in Slovenia in 2017.
A third of all value added and a third of all investments by these companies was generated by companies controlled from Germany and Austria.
The largest share of R&D spending, a third, was generated by companies controlled from Switzerland.
Together with Germany-affiliated ones, they generated almost 60% of all R&D expenditure by foreign companies in Slovenia.
More than half of the entire value added generated by foreign companies was attributable to companies in industry.
Foreign inward affiliates in Slovenia were controlled from 106 countries, but in more than 90% of the cases from Europe. Approximately half of them had their controlling company in the EU.
The majority, or almost two-thirds of them, were controlled from Italy, Serbia, Russia, Bosnia-Herzegovina, Austria, Croatia and Germany.
The Statistics Office says that economically the most important foreign affiliates were controlled from Germany, Austria and Switzerland.
More details on this data can be found here
STA, 6 September 2019 - Slovenian carrier Adria Airways has reached an agreement with pilots that averts a series of strikes that were due to begin on Sunday and threatened to severely disrupt air traffic in Slovenia.
"Adria Airways will carry out scheduled and charter flights according to the planned flight schedule," the company said in a brief press release on Friday without revealing the details of the agreement.
Marko Kastelic, a representative of the pilots' trade union, said that the reason the strike was called off was that they adopted a draft of a new collective bargaining agreement.
The draft will now be put to a vote to the trade union's membership. "Once it is endorsed, which is what we expect will happen, we'll also cancel the other two strikes," said Kastelic.
The trade union of pilots had threatened to start striking in order to force a change of the collective bargaining agreement, which formally expired on 1 September.
The pilots sought to improve what they said were "unbearable working conditions", urging the management to "stop violating the existent collective bargaining agreement".
Adria pilots complained about the bad working conditions before and after the sale of this state-owned company to the German fund 4K Invest was completed in early 2016.
Since months beset by delays, flight cancellations and unannounced mergers of flights, the airline has had financial trouble for a while and is currently looking for a strategic partner.
Despite its problems, Adria accounts for roughly half the traffic at the Jože Pučnik International Airport in Ljubljana.
Related: Adria Airways’ difficult 2019
2019 has been quite a year for Adria Airways. In January in seemed that the carrier had overcome it’s financial problems, at least to the extent it was allowed to keep operating. In February it announced cuts to its summer schedule, and got a new owner. In April a deal with Sukhoi Civil Aircraft Company, which would have seen the Russian company become a strategic partner of Adria, fell through, while in July there was talk of the carrier actually collapsing – after days of cancelled, delayed, and merged flights – with the government announcing contingency plans if this came to pass. The same week saw suspicions raised over Adria Airway’s upcoming financial report, followed a few days later by a claim from managers that the problems at the airline were now being addressed. More recently, pilots at Adria Airways have announced a set of three 3-day strikes, with the first due to start 8 September (2019).
The latest piece of bad news is that Adria had to cancel flights to and from Vienna last night because it was due to be met by a lawyer for the FairPlane compensation claims company, and there was a risk that the aircraft would be seized over an unpaid debt. The €250 debt is in relation to a compensation claim that a court ruled Adria must pay an Austrian passenger on a cancelled charter flight in September 2017, which was due to fly from Cephalonia (Greece) to Graz.
In a press release, FairPlane, acting on behalf of the passenger, stated:
The deadline for the payment expired on Thursday September 5, 2019 so at 19.00 CEST, an executor, police and a lawyer were present at the gate at Vienna Airport. Usually, in such cases, sales from on board duty free, as well as other property belonging to the airline found immediately on site is seized. If nothing can be held or there is resistance from the crew, the executor can impound the aircraft.
According to reports in the Slovenian media, after cancelling last night’s flight Adria transported the passengers between the Slovenian and Austrian capitals by bus. While it remains unclear as to whether Adria has paid the €250 it owes the passenger, this morning the carrier did operate a flight to Vienna.
STA, 5 September 2019 - Slovenia is among the top EU member states in reducing the share of uncollected value added tax (VAT) revenue, or VAT gap, according to a study for 2017 released by the European Commission on Thursday.
Slovenia is among the seven EU countries which reduced their VAT gaps by two to four percentage points, with the country bringing it down by around three percentage points to 3.5%.
The most successful country in this respect was Malta, which reduced its VAT gap by seven percentage points, followed by Poland (six points) and Cyprus (four points).
In 2017, the biggest VAT gaps were registered in Romania (36%), Greece (34%) and Lithuania (25%), and the smallest in Sweden, Luxembourg and Cyprus, where the shares stood around 1%.
The study shows that the EU member states lost a total of EUR 137.5 billion in uncollected value added tax in 2017, which is EUR 8 billion less than in the year before in nominal terms.
That year, the amount represented 11.2% of total VAT revenue in the entire EU, which is one percentage points down compared to 2016, the European Commission said.
The trend of the decreasing VAT gap was observed for the fifth year in a row in 2017, and a preliminary estimate for last year suggests that the gap is to decrease further and drop below EUR 130 billion or 10% of the expected VAT revenue.
STA, 4 September 2019 - Abanka Group generated EUR 26.3 million in net profit in the first six months of the year, according to unaudited report, which is 32.3% less than in the same period last year. Net interest revenue was down by 0.5% and net non-interest income by 19.5%, Abanka said on Wednesday.
Net interest reached EUR 29.8 million and net non-interest income stood at EUR 27.3 million, according to a report published on the web site of the Ljubljana Stock Exchange.
The bank's supervisory board got acquainted with the results on Tuesday.
The total assets of the group, which includes the Abanka bank and real estate company Anepremičnine, amounted to EUR 3.76 billion at the end of June, after standing at EUR 3.73 billion at the end of December.
Anepremičnine contributed EUR 17.4 million or 0.5% to the group's consolidated total assets.
Abanka posted a net profit of EUR 26.2 million in the January-June period, down 35.2% from the same period last year. Its market share reached 9.4% at the end of June.
Net interest was up by around 1% to EUR 29.8 million, while net non-interest income dropped by a quarter to EUR 26.2 million.
The bank said the rise in net interest was due to higher interest income from loans to non-banking clients.
Abanka's cancelled provisions and impairments reached EUR 5.5 million net after topping EUR 13.4 million in the same period last year.
Loans to the non-banking sector reached EUR 2.05 billion at the end of June, which is up EUR 86 million compared to the end of 2018. Loans to legal entities and sole traders increased by EUR 61.9 million and loans to individuals by EUR 24.1 million.
The biggest share of loans, 45.5%, were to individuals, followed by big companies (25.2%) and small and medium sized companies (17.1%).
The state has been Abanka's sole owner since a massive bank bailout at the end of 2013 which also saw the state salvaging NLB, NKBM and Banka Celje. The latter was merged with Abanka in 2014.
In June, a contract was signed on the sale of Abanka, Slovenia's third largest bank, to NKBM bank. The transaction is to be completed by the end of the year.
All our stories on banks in Slovenia are here
STA, 1 September 2019 - Slovenia's national system for instant peer-to-peer money transfers will be up and running by the end of 2019 or early 2020. Most of the banks have developed a special mobile app for the purpose.
The system, called Flik, is being developed by Slovenian banks in cooperation with the national payment processor Bankart, based on its exiting Bips IP infrastructure.
Transfers will be processed within seconds round the clock and every day of the week, unlike now when transactions are settled every two hours, and even than only until 4:30pm and only on weekdays.
The system involves all 15 Slovenian commercial banks and savings banks, which own it, Paul-Alexandre Raveleau from SKB bank and Tatjana Bole Pirc from DBS bank, have told the STA.
The pair, who head the inter-bank board for Flik, say that the rules and procedures have been established and that the central-bank Banka Slovenije will act as a major catalyst.
They say the banks decided to develop the system in order to provide a simple channel for fast and safe instant money transfers.
Currently, various technical solutions are being tested with the plan that 13 out of the 15 banks launch the Flik system at the end of 2019 or right at the beginning of 2020.
By mid-2020, another bank will make the service available, while another of the participating banks is yet to announce the launch date.
Eleven of the 15 banks have decided to develop a special app, while the remaining banks will include the new feature in their existing mobile bank or digital wallet solutions.
Further on, the banks will be able to opt for various solutions together, depending on the response and desire of the customers, Raveleau and Bole Pirc say.
The app will be accessed by the PIN code or fingerprint or some other biometric code allowed by smart phones, with transactions conducted using contacts in the phone, that is without time-consuming typing of payer and recipient account numbers and other data required on payment orders.
Raveleau and Bole Pirc say that the system is fully compliant with the EU's general data protection regulation, because it has been developed in cooperation with Slovenia's information commissioner.
The system will initially allow transfers of up to EUR 15,000 between the accounts of physical persons, but the banks would like to expand the system to in-store payments as early as next year.
This will require upgrading the existing POS terminals (there are between 35,000 and 40,000 of those in Slovenia at the moment) and educating cashiers. The timeline will thus also depend on retailers.
The customer experience will be similar to using contactless payment cards. For the smaller shops, bars or restaurants that do not use POS terminals special mobile apps are being tested QR code scan payments.
At later stages, the banks would like to expand instant transfers to online shopping, transactions between businesses and between customers and businesses and some transactions with the state.
Ideally, the users should get the chance to make instant transfers for the whole range of various payment transactions. The ambition is that Flik becomes a national payment standard.
The amount of transfer, now capped at EUR 15,000, may be raised or lowered in the future, depending on the users' response.
Raveleau and Bole Pirc say that this is a mayor investment for Slovenian banks, but they would not specify as each bank invests in development of its own technical solutions, based on common rules.
So are the fees for the customers up to the bank's business policies, while Raveleau and Bole Pirc expect transfers between physical persons and in-store payments to remain free for physical persons.
Bips is intended for domestic money transfers, while later instant cross-border transfers will be made possible based on the Target Instant Payment Settlement (TIPS), which became operational in late 2018.
Slovenian banks will join TIPS on their own or via Bankart gradually, and so they enter the Sepa Instant Payments system.
For cross-border transfers to become as simple as those in Slovenia and some other countries that have introduced national instant payment systems, a common EU solution will be needed or at least integration of the national systems.
UPDATE: On Friday, 6 September, a deal was reached and the strikes were cancelled (see more details here)
September 3, 2019
The possibility of a series of three-day strikes announced for September by the Traffic Pilots Union of Slovenia (SPPS) is becoming increasingly realistic following another round of unsuccessful contract negotiations between Adria Airways’ leadership and its pilots.
In a recent press release, the Pilots Union explains that a request for the start of negotiations for a new collective agreement has been submitted several times to Adria Airways’ management since the end of the summer 2018. The main reason for the request being made at the time was that the old contract expired at the end of August 2019 and the Union hoped to have enough time to negotiate a new ones. Negotiations, however, only began in May of 2019 and included the union’s demand for the Adria Airways leadership to cease all the violations of the previous work contract.
As the talks apparently proved unsuccessful, on August 15 the union declared a series of strikes for September.
With the end of the old collective agreement and without a new one in sight, the Traffic Pilots Union of Slovenia (SPPS) announced to the media that the series of 3-day strikes are about to begin this Sunday. The dates on which Adria’s pilots will not fly unless an agreement is suddenly reached are as follows:
Strike #1: from September 8, midnight (00:00) till midnight (23:59) September 10, also
Strike #2: from September 18, midnight (00:00) till midnight September 20
Strike #3: from September 30, midnight (00:00) till midnight October 2
Apart from the announced strikes, portal 24UR reports that Adria Airways also faces a growing number of angry passengers whose flights get cancelled or rescheduled.
Adria Airways was the only Slovenian airline with its base in the International Airport Jože Pučnik (also known as Brnik or Ljubljana Airport). The state sold the company in 2016 to 4K Invest, a Luxembourg-based restructuring fund, which has been running the company since.
All our stories about Adria Airways can be found here
STA, 2 September - The shareholders of spa operator Terme čatež approved the sale of Marina Portorož to MMNT on Friday. The joint venture established by investment company Adventura Holding and Glen, a company owned by the management of furniture retailer Lesnina, is to pay EUR 21.6 million for the country's biggest marina, the newspaper Finance reports.
Minutes of the AGM, available on the web site of the agency for public records (AJPES), show that the sale of Marina Portorož received the backing of 99% of all votes present at the meeting. The AGM was attended by 98.9% of capital with voting rights.
The AGM also approved a division and takeover contract between Terme Čatež and Marina Portorož under which just under EUR 40 million in assets will be transferred in the takeover and a similar amount in liabilities.
Among other things, about EUR 33.5 million worth of property is to be transferred, as well as a 7.4% stake in DZS, the biggest owner of Terme Čatež.
The AGM also gave a new mandate to supervisors Ada de Costa Petan, Robert Krajnik, Rok Gorjup, Mitja Grum, Samo Roš and Goranka Volf. The supervisory board also includes three employee representatives.
The shareholders moreover decided not to cover EUR 5.5 million in loss, which several small shareholders intend to challenge.
STA, 2 September 2019 - Lek, the Slovenian subsidiary of pharma company Novartis, has aborted its investment into expanding production in the town of Prevalje, north, where it has been present for more than 40 years. The decision seems to be have been made due to lower demand for generics following an in-depth analysis and studying all options.
"Despite lower demand on the generics market, especially in the US, over the recent years and despite the need for new technologies, Novartis has studied all options to realise the planned expansion.
"The analysis has shown the facility is suitable for introducing the technology of continuous manufacturing, but this has proved to be merely a short-term solution, so we decided not to continue the investment," Lek wrote in a press release on Monday.
The cornerstone for the additional facility for broad-spectrum antibiotics in Prevalje, a EUR 150 million investment, was laid in April 2017.
Production at what would have been Novartis's biggest investment in Slovenia to date was expected to be launched in 2020, bringing 140 much needed jobs to the Koroška region.
The Slovenian government had approved EUR 7 million in state subsidy for the new factory, which Lek was to receive in three years.
The company has so far received only EUR 1.5 million, but will return it by the end of the month, the Ljubljana-based company told the STA today.
The additional facility was completed at the end of 2018, but Novartis said already that spring that the purchase of technology for the new factory was suspended.
It explained the facility was first planned for classic production, but then it made it among possible locations for continuous manufacturing.
Last year Lek also decided not to co-finance a purification plant in Prevalje which would be used for Lek's waste waters.
Nevertheless, Novartis said today it was strengthening investment in new technologies in Slovenia.
However, the local community is extremely disappointed at the decision, regretting the loss of jobs and opportunities for the region's economic development.
"Today is a sad day not only for Prevalje, but for the entire Meža Valley and Koroška," Mayor Matic Tasič told the STA.
"Every investment is vital for entire Koroška, and of course we're interested in successful investments," said the director of the local chamber of commerce, Aleksandra Gradišnik.
She hopes Lek would implement its business plans, whatever they are, to the benefit of the region.
Tasič added "we did not expect a company with such a good reputation to afford to invest more than EUR 30 million and then abort the project".
Novartis is yet to decide what to do with the new facility.
The company, which employs more than 4,200 workers in Slovenia, has so far invested over EUR 2.3 billion in Lek, which makes it the biggest foreign investor in the country.