Banka Slovenije said the banking system in 2013 continued to be affected by deleveraging on capital markets and unfavourable economic conditions as well as domestic factors. All this had a strong impact on the lending activity, the bank said.

Total bank assets in Slovenia declined by 11.1% or EUR 5.1bn, including EUR 2.9bn as part of deleveraging on foreign markets.

Loans to the non-banking sector declined by EUR 6.5bn, with almost half of the decline attributed to the transfer of non-performing claims to the Bank Asset Management Company (BAMC), the country's bad bank.

The central bank said that monthly indicators suggested the economy continued to stabilize in the last months of 2013, but was quick to point out that despite favourable trends and improved confidence, the economic uncertainty remains.

Unemployment figures in January were at their highest levels since 1994. The share of active working population has meanwhile improved in November for the third month in a row, which points to a gradual easing of the situation and also to structural changes on the labour market, the central bank said.

Average inflation in terms of HICP edged down by 0.9 percentage points year-on-year to 1.9%.

The budget deficit reached EUR 1.5bn or 4.4% of estimated GDP and was in line with the supplementary budget from July 2013. Borrowing reached almost EUR 6bn by November last year, but is expected to increase further due to bank recapitalisations, the central bank said.

Banka Slovenije also released information on counterfeit money - authorities detected 1597 counterfeit banknotes, down 32.4% compared to 2012.