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"The results for 2014 show the path is right," NLB chairman Janko Medja told reporters in Ljubljana on Friday after the state-owned bank released unaudited results for 2014.

"After the transfer of non-performing loans to the Bank Asset Management Company, after extraordinary measures in late 2013, comprehensive asset review and after corresponding impairments, NLB is a healthy and stable bank today, contributing actively and becoming a fit partner to the corporate sector."

Medja believes the bank has put behind a period of "instability and recapitalisations" with the new challenge ahead being the bank's privatisation by 2017 as pledged by the government. "The management is not taking positions on the content, but we wish for stable owners," Medja said.

The supervisory board believes that the bank made a "key turnaround" in 2014 by "exceeding profit targets fourfold" in what was a "tough" year, board chairman Gorazd Podbevšek said, adding that the supervisory board "trusts the NLB management".

Due to last year's profit, the bank's capital adequacy ratio "increased substantially above the requirement of the European Central Bank", Podbevšek said. The group's capital adequacy stood at 17.6% last year, which compares to the ECB's requirement of 14.7%.

The bank plans a further profit growth for this year, but Medja would not give any concrete figures. "We will continue with responsible growth in 2015 and 2016," he said, adding: "We are lending to good and healthy businesses, but we no longer give out loans without sound business plans."

The group's total assets shrank by 5% last year to EUR 11.91bn with the strategic plan being to reduce them to about EUR 11bn by 2017. "The decrease is at the expense of non-strategic activities, while the total assets of core activities are slowly increasing," Medja said.

The group operating profit before provisions and impairments amounted to EUR 207.5m, an improvement of EUR 192.1m compared to 2013. The bank attributed 57% of the increase to the effects of the bank repair measures in late 2013 and the rest to improvements in operations.

Group net operating revenue was up 47% from 2013 to EUR 511m with net interest revenue up 41% to EUR 330m and net non-interest revenue up 58% to EUR 181m.

Similarly, the core bank generated EUR 369.1m in total revenue, up 42% from 2013. Net interest revenue rose 44% to EUR 227.3m and net non-interest revenue increased by 39% to EUR 141.8m.

The cost of impairments and provisions dropped considerably following the transfer of a part of non-performing claims to the Bank Asset Management Company, collapsing by 92% to EUR 93.1m at the core bank and by 87% to EUR 141.4m at the group.

The bank says that the share of non-performing loans remains stable at 25.5% at the group level with the volume down 1% to EUR 1.04bn. The volume of bad loans at the core bank fell by 3% to EUR 660m, representing 21.2% of all loans.

In a bid to establish accountability for bad banking practices in the past, NLB filed 51 criminal complaints against 62 people last year for 64 suspected acts of crime. Medja said half referred to third parties and half to former staff at "all possible levels".