Press release after the Governing Board of the Bank of Slovenia meeting
1) The Governing Board of the Bank of Slovenia discussed the performance of the banking system during the first six months of 2012, and developments on the capital market. As the Bank of Slovenia announced last month, the banking system’s total assets declined by EUR 1.2 billion, primarily as a result of the repayment of NLB bonds issued with a government guarantee in 2009 and a decline in government deposits. The trend of repayment of liabilities to the rest of the world has continued, partly as a result of the downgrading of long-term sovereign debt and certain banks. The decline in these financial resources was not fully replaced by more-stable funding. Household deposits increased by 0.5%, a lower rate of growth than last year. Lending is being limited by the cost of foreign funding, and by low demand from creditworthy corporates and households. Loans to the non-banking sector declined by 5.8% before tax in July.
The operating result during the first seven months of the year reveals an increase in the banking system’s gross income, primarily as a result of an increase in non-interest income, although net non-interest income was down 10%. Rising impairment and provisioning costs had an impact on the operating result, which during this period was a loss of EUR 4 million.
The capital market saw a slight increase in inflows into the domestic mutual funds. The SBI TOP fell by 1.1% in July, taking the year-on-year change to -29.1%. By contrast, global stock market indices mostly rose in July.