Press release after the Bank of slovenia Board meeting on 19 March 2013
1) The Governing Board of the Bank of Slovenia discussed current supervisory matters.
2) The Governing Board of the Bank of Slovenia also discussed the performance of the banks in the current year, developments on the capital market, and interest rates. The performance of the banks at the beginning of the year continued to be affected by the same factors that affected their performance in 2012: limited access by the banks to foreign sources of funding and the continuing economic crisis. The Slovenian banking system’s total assets continue to decline as a result of the banks’ continuing debt repayments to the rest of the world. This is also one of the reasons for the continuing contraction in lending activity.
The banking system’s total assets were down by EUR 88.5 million in January or 6.6% in year-on-year terms. The banks repaid liabilities to foreign banks in the amount of EUR 171 million and to the Eurosystem in the amount of EUR 78 million. Government deposits continued to decline on the funding side. Positive shifts in household deposits were seen in recent months. The aforementioned deposits were up for the third consecutive month in January.
The contraction in lending activity continued in January. The year-on-year decline in loans to the non-banking sector stood at 6.8%, with loans to all client segments, except the government, recording a decline. The contraction in consumer loans and the stagnation of housing loans to households both continued. In the context of the relatively low risk associated with the approval of loans to households, the main reason for the decline in the aforementioned loans lies in lower demand and less so in limited supply.
Growth in the banks’ non-performing claims slowed at the beginning of 2013. One factor in the slowing growth was an increase in write-offs in December, which led to a contraction in the banking system’s portfolio, particularly with respect to sectors with higher proportions of non-performing claims. The proportion of the banking system’s classified claims accounted for by non-performing claims stood at 14.6% in January. Claims against the construction sector stand out in terms of the proportion of non-performing loans, while claims against corporates from the sector of financial intermediaries and non-monetary financial institutions (including holding companies) stand out in terms of the pace at which non-performing claims are growing. Taking into account the creation of impairments and provisions at the end of last year and their disclosure in the financial statements compiled from the final accounts for 2012, the banking system generated a pre-tax loss of EUR 769 million last year. The banking system disclosed a pre-tax profit of EUR 10 million in January.
3) On 19 March 2013 the Governing Board of the Bank of Slovenia approved the audited financial statements for 2012, which were complied in accordance with the legal basis for accounting and financial reporting in the framework of the European System of Central Banks (the ESCB).
The Bank of Slovenia disclosed a surplus of income over expenses in the amount of EUR 131.9 million in its profit and loss account for 2012 (2011: EUR 17.1 million).
Net interest income amounted to EUR 250.8 million in 2012 (2011: EUR 112.2 million). Realised gains, valuation losses and provisions were negative in the amount of EUR 134.0 million (2011: negative in the amount of EUR 91.2 million). Realised gains on securities amounted to EUR 50.3 million (2011: EUR 51.2 million), valuation losses to EUR 0.1 million (2011: EUR 131.5 million) and provisions to EUR 184.2 million (2011: EUR 10.9 million).
Fees and commissions, and other income amounted to EUR 41.4 million in 2012 (2011: EUR 23.2 million). This amount includes the budgeted allocation of Eurosystem monetary income in the amount of EUR 26.8 million (2011: EUR 2.8 million).
The Bank of Slovenia’s operating costs were down EUR 0.8 million in 2012 to stand at EUR 26.4 million (2011: EUR 27.2 million).
The aforementioned result will be allocated in accordance with Article 50 of the Bank of Slovenia Act.
The Bank of Slovenia’s financial statements for 2012 are expected to be published with detailed notes on http://www.bsi.si in April 2013 as part of the annual report.