Progress Made by the Banks of Slovenia in 2016

The aggregate operating profit constituted 379 million euros, which is 221 million euros more than in 2015. Net profit amounted to 344.3 million euros (for comparison: in 2015, this figure was only 115.3 million euros).

In their keynote activity—the receipt of interest income—banks have proved to be less successful than in factoring and crediting.

Ljubljana. In 2016, Slovenian banks in total received 379 million euros of operating profit, which is 221 million euros more than in 2015. The main reason for this financial success is already known: a decline in factoring and crediting from the last year’s figure of 313 million euros to 85 million euros.

According to recent data, which have not yet been confirmed by audition of the Bank of Slovenia (BS), in the past year, all banks operated at a profit, and the total amount of net profit constituted 344 million euros. Reduction in factoring and crediting and, therefore, high profit increased the return on capital of Slovenian banks: the growth rate was 8.3%, which is at least two times higher than in 2014 and 2015 (3.63%). The capitals of banks for the recorded period have also risen from 4.4 to 4.6 billion euros. The Bank of Slovenia notes that the assets of the Slovenian banking system in the past year continued to decline, but not as dramatically as in previous years: total assets of the banking system in 2016 decreased by 0.9%—down to 37 billion and 52 million euros.

In 2016, Slovenian banks were more successful in factoring and crediting programs created in the past. However, Slovenian banks were less successful (and therefore less cost-effective in terms of profitability) in their core activity: the creation of net interest income. In the past year, it fell to 670 million euros, or by 10%, as compared to the last year’s figure of 745 million euros. According to the recent data of the Bank of Slovenia (BS), in late 2013, the interest margin fell below 2% for the first time after the rehabilitation of banks. However, in the past year, banks improved operating performance in the field of non-interest income, which in total increased by 46 million euros or 11%.

The crediting index growth should be noted in the non-banking sector due to the positive trend in December. To date, the volume of loans to the population of Slovenia (8.8 billion euros) has greatly exceeded the volume of loans to companies and non-financial corporations (8.1 billion euros). The most significant growth is in loans to individuals. Despite the relatively low interest rates on deposits, a growing number of citizens keep their savings in banks. Deposits of the population increased from 15.5 billion euros at the end of 2015 to 16.6 billion euros in 2016. Therefore, an increase is over 1 billion euros. Thus, the bank deposits of citizens far exceed the deposits of enterprises (5.7 billion euros) and the government (1.5 billion euros).

As for the subprime loans: in the past year, the overdue loans with payments delayed for more than 90 days decreased from 3.4 to 2.1 billion euros, or from 9.9% to 6.5% of total accounts receivable.