Banking profit more than doubles
Banks in Slovenia generated €467 million in net profit in the first half of 2023, an increase of 145% year-on-year, fresh data from the central bank shows.
The report shows that profit before tax increased even more, at an annual rate of 151%, to reach €533 million.
Net interest revenue was up by nearly 105% to €661.5 million as non-interest revenue increased by 8% to €317 million.
Cash deposits rose by 1% year-on-year, while loans went up by only a fraction.
Lending to the non-banking sector in June increased by 0.1% to just under €27.1 billion.
In the six months to the end of June, the amount of loans decreased by €464 million, an improvement on €500 million at the end of May.
Loans to households totalled €12.2 billion at the end of June, 4% more than in the same time last year. Of these, housing loans accounted for €8.1 billion, up 3% over June 2022.
The amount of cash deposits held by the non-banking sector reached €39.6 billion at the end of June, 5% more than a year ago. Deposits by households grew by 5% to nearly EUR 26.4 billion.
Total assets of banks in Slovenia increased by 7% year-on-year to €51.3 billion at the end of June.
NLB reports lower profit
The country's largest banking group, NLB reported a net profit of €242.7 million for the first half of the year, a decrease of 15% the same period last year. The figure includes the bank's operations in the region of the former Yugoslavia. In the second quarter, net profit rose by 2% to €122.6 million.
The bank's interim report, released on 10 August, shows the regular profit before impairments and provisions nearly doubled year-on-year to €270.9 million in January-June.
The bank noted that profit in the same period in 2022 was strongly impacted by negative goodwill from the acquisition of N Banka, formerly a subsidiary of Russian Sberbank.
Negative goodwill occurs when the fair value of the net assets acquired in a acquisition exceeds the purchase price, which means the buyer gained an instant profit.
"The moderate growth in quarter one compared to quarter two was primarily the result of lower release of impairments and provisions for credit risk and higher income tax related to dividends received from NLB group members," NLB said.
Net non-interest income remained flat year-on-year at €131.7 million in the first half of the year, while net income from interest increased by 68% to €380 million.
Costs rose by 10% to €240.7 million, rising in most of the banks in the group, foremost due to inflation in the region and integration of N Banka in Slovenia.
Release of impairments and provisions for credit risks amounted to €29.9 million, mostly due to the effects of a favourable portfolio development and changed risk parameters in June.
The group's total assets increased by 9% y/y to €24.7 billion as of 30 June. The headcount decreased by 240 to 8,154.
Gross loans to clients rose by 6% or by €803.1 million, of which €500.7 million to individuals, which happened despite a gradual slowdown in housing loans.
Deposits rose by 4% or by €773.8 million, of which €670.6 million came from households.
The bank highlighted the issuance of €500 million inaugural green senior preferred bond as "one of the key achievements" in the second quarter, saying it confirmed its commitment to sustainability to improve the quality of life and create a better footprint in its home region of SE Europe.