Impairments and provisions excluded, the NLB posted a group net profit of EUR 35.1m and a core net profit of EUR 35.3m, according to a posting on the website of the Ljubljana Stock Exchange.

The bank said the bottom line has also been affected by a decrease in the volume of loans to the non-banking sector, further deleveraging on capital markets and a drop in deposits by retail customers and businesses.

Operations have also been marked by activities to ensure capital adequacy, including the conversion of the hybrid loan to shares, further streamlining measures, withdrawal from non-strategic markets and activities related to the transfer of assets onto the bad bank, the bank said.

Total assets decreased by 3% compared to the end of 2012 both at the group and the core bank level, edging down to EUR 13.84bn and EUR 11.09bn, respectively.

Loans to the non-banking sector were down 4% to EUR 9.13bn at the group level and down 5% to EUR 7.47bn at the bank.

The group's net interest income totalled EUR 133.6m in the first half of the year, down 33% year-on-year. The core bank's net interest income declined by 36% to EUR 84.7m.

Operating costs decline by 13% at the group level and by 10% at the core bank. Personnel costs, which represent over half of all costs, were down by 14% at the group level and 10% at the core bank.

The group's capital adequacy ratio was 10.1% at the end of June, while the Tier 1 capital ratio stood at 8.5%, down by 0.3 percentage points compared to the end of 2012. The core bank's Tier 1 ratio stood at 9.8%, down by 0.1 percentage points compared.

Major shareholders at the end of June included the state (77.51%), KAD (6,23%), SOD (5.58%), bankrupt financial firm Poteza Naložbe (2.24%), insurer Zavarovalnica Triglav (1.27%), Uctam (0.70%), NFD 1 (0.60%), Triglav vzajemni skladi (0.49%), Vanermo (0.29%), and bankrupt firm CG Invest (0.25%).