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Slovenian banks' NPE ratio dropped to 5.4% in March, says central bank

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Slovenian banks' NPE ratio dropped to 5.4% in March, says central bank

The nonperforming exposure ratio of Slovenian banks dropped to about 5.4% in March, equivalent to €2.3 billion, the country's central bank said May 23.

Banka Slovenije said the NPE ratio fell by 0.3 percentage point after the new International Financial Reporting Standards, IFRS 9, came into force. The NPEs in nonfinancial corporations, meanwhile, declined to €1.6 billion, the central bank added.

The banking system's lending activity in the household segment has been slow since October 2017, with the year-over-year rate at 6.5% by March-end. Growth in housing loans and consumer loans also slowed down year over year to 4.1% and 11.5%, respectively. The slump comes as credit standards on consumer loans tighten, while those on housing loans are unchanged, the central bank noted.

The first-quarter pretax profit of Slovenian banks amounted to €143 million, similar to the year-ago period, the central bank said. However, impairments and provision increased in March, bringing the total net release of impairments and provisions for the quarter to €8.7 million.

As of 2017-end, the banking system's total capital ratio was 19.8% on an individual basis and 18.1% on a consolidated basis.