7

Miranda, the chairman of Banka Koper, underlined that the banking system was recuperating and its basic goal at the moment was to regain profitability, which remains low.

The sector is showing improvement in the area of funding sources, while the situation in crediting activity remains grim. The data show that funding costs are dropping, while the share of deposits by non-banking sector in funding sources is increasing.

Miranda believes the picture reflects a partial restoration of trust. There is an increase not only of deposits under EUR 100,000, which enjoy a state guarantee, but also of deposits exceeding EUR 100,000.

But the progress in credit activity is slow and there is still a lot to do in this field, according to Miranda. Among other things, the system differentiating between less risky and more risky loans remains poor. He believes new standards are needed to create a fairer system that would allow cheaper funds for successful companies.

Finance Ministry State Secretary Metod Dragonja meanwhile pointed out that the county had invested heavily to stabilise the banking system. The recapitalisation increased Slovenia's public debt by over EUR 3.4bn, while state guarantees for the bad bank exceeded EUR 1.4bn.

By the end of the year, the last of the recapitalisations will be completed and the ministry believes that with the last recapitalisation of Banka Celje, the project of helping out banks with taxpayers' money will be complete.

The state secretary moreover underlined that banks should focus on measures to reduce the remaining toxic loans and active management of their investments.

What is more an inter-departmental task force has been established to coordinate the restructuring of Slovenia's economy. Miranda promised that banks will be an active partner in this process.