ex-ceeding Slovenias gross domestic product by nearly 20 percent. TheSlovenian banking market is thus becoming increasing comparableto its counterparts in neighboring Austria and Italy. The numberof banks operating in Slovenia is shrinking as a result of acquisi-tions, reaching 18 this May, according to data from the state Bank ofSlovenia. Their average profitability increased as well, with averagereturns on equity (ROE) in the Slovenian banking sector last yearbeing 16.3 percent, more than in previous years.What was the secret ofsuch a favorable improvement in the 2007balance sheets ofSlovenian banks? Bank ofSlovenia analysts under-line that the banks did sigmficantly better in managing and control-ling costs. These consequently grew substantially slower than theirvolume of business and thus fell faster in real terms than interestmargins, which also resulted in higher profits.Among the main reasons for last year's rapid growth m bankingtransactions were the introduction of the euro, which sianificantlyreduced foreign-exchange risk, high 6.1-percent economic growth,as well as relatively favorable interest rates, particularly in the firsthalf of the year, which attracted numerous borrowers. Bank loansto households thus surged by slightly over 27 percent or 1.4 billioneuros and the total financial debt of the Slovenian household sec-tor rose from 26 percent to just over 28 percent of GDP over thepast year. Local companies, which invested at an accelerated pace,borrowed even more heavily from banks last year. Their financialburden therefore increased from 233 percent to over 260 percentofGDP. In total, the banks' loans to the interbank sector svvelled byas much as 37 percent, thus indicating a great desire for loans andthe cyclical overheating ofthe Slovenian economy. The banks wereparticularly active in providing housing loans, which is reflected inlast year's record grovrth in the Slovenian housing market. Amongthe more specific banking services last year were also loans for thefinancing ofmanagement buy-outs. With no significant takeovers or newbank entries in Slovenias banking sector in2007 and the first half of 2008, there werealso no major changes on the list of thecountry's leading banks. Nova Ljubljanskabanka (NLB), the country's largest bank,which this May also fonnally acquired threesmaller local banks as members of its group(NLB Domžale, NLB Koroška and NLB Za-savje), still tops the list, while Maribor-basedNKBM and Ljubljana-based Abanka ranksecond and third respectively. In contrast,activity in the banks themselves was muchmore intense: at the end of 2007, the gov-ernment partially privatized Maribor-basedNKBM through an initial public offeringand listed it on the stock exchange vvhile stillmaintaining a majority stake in it. All of thethree major banks mentioned also decidedto increase their capital, yet only Abankahas done it so far, raising its capital by 102million euros. Abanka is also interesting toforeign investors but its major stockholders,such as Kranj-based tire manufacturer Sava,are keener on the idea of merging Abankawith Gorenjska banka, thereby creating thesecond largest bank in Slovenia. NKBM,too, has been attractive to foreign investorsfor quite some time, especially because of itsextensive retail network operated by PBS, itssubsidiary, throughout Slovenia through thepost offices ofPošta Slovenije. PSST, WANNA BUYA HOTBANK?Changes are also taking place in NLB.Belgian insurance company KBC has al-ready announced the sale of its 34-percentstake with the help of the investment bankGoldman Sachs, and EBRD, too, is selling its five-percent stake in NLB. So, almost 40percent of the shares of the country's big-gest bank are on the market. The bank isstill not quoted on the stock exchange butin mid-May, on the occasion of the publicsale ofits shares to fund expansion, financeminister Andrej Bajuk announced gov-ernment measures aimed at ensuring thatpreparations for the listing of its shares onthe Ljubljana Stock Exchange would startby August 30th at the latest. The timing isnot accidental: on September 21, Slovenia will hold parliamentary elections, whichare likely to bring about some changes inthe composition of the ruling coalition.This is important in light of the fact that inall three leading banks the state still has adecisive or at least a very important say.The intertwined ownership structure ofthe banks is also interesting. While control-ling almost a third ofAbanka, state-ownedinsurance company Zavarovalnica Triglavis at the same time significantly increasingits stake in NLB. And Sava Group, the big-gest individual shareholder ofAbanka, alsoholds a majority stake in Gorenjska banka,the most profitable bank in Slovenia, which The listing ofNLB, the larg-est Slovenian bank, on theLjubljana Stock Exchange willtake place by August 30th atthe latest. Slovenian Insurance CompaniesPremiums Marketin mil EUR Share in %Composite insurance companies:_______________________Trialav Insurance Companv 660 41.00Adriatic Slovenica Insurance Company __________233___ 14.49Maribor Tn.SLirance Company 210 13.07Tilia Insurance Company _______ ____52___ 3.20Generali Insurance Companv 44 2.76Merkur Insurance Company 38 2.35GRAWE Insurance Companv 32 2.01Victoria-Volksbanken Insurance Company, branch 0.3 0.02Specialised insurance companies: _____________________Health Insurance Mutual (Vzajemna) 219 13.60TRIGLAV Health Insurance Company 40 2.47Slovenica Lite Insurance Company 39 2.40NI.B Vita Life Insurance Company 31 ___1.90SID - First Credit Insurance Companv (SEC - FCl)____11 0.70ARAG Legal Expenses Insurance Company _________________Souri-e: Slatistical Insurancc Bulletin 2007 Matjaž Kovačic, first man ofNKBM is strongly focused on the Gorenjska regiononly. Among current trends in the Slov-enian banking market, mention should also5e made of the fairly rapid growth of somesmaller and more specialized banks whoseowners are headquartered in Austria andOn the other hand, due to its relative-y small size and other characteristics, theSlovenian banking market is not particular-ly interesting to some larger internationalIbanks from Germany, the US, the UK andiother countries. AND 2008?On the whole, Slovenian banks are stableand their comparatively favorable averageMarko Simoneti, directorofLjubljana's Stock Exchange profitability continued during the first monthsof this year, despite the impact of the interna-tional credit crisis, which has also affected theoperations of some European banks. Accord-ing to official Bank of Slovenia data, they gen-erated 140 million euros in profits in the firstquarter ofthis year. Hovvever, their total profitsare expected to plunge a bit this year, primarilyfor three reasons: the antidpated slowdown ineconomic growth, the reduced demand forloans, and more expensive long-term sourcesof revenue the banks get from abroad. On topof this, their financial performance will alsobe affected by Basel II accounting rules, which 0.~Marjan Kramar is still in charge ofthe largest Slovenian bank NLB, though the rumors sayhe might lose hisposition this summer Aleš Žajdela, president ofA Banka impose additional capital requirements for op-erational risks, such as those arising from lastyear's very strong loan growth. (The Basel IIaccords are recommendations on banldng lawsand regulations issued by the Basel Committeeon Banking Supervision.) Banking experts havebeen emphasizing for some time that Slovenianbanks should have more solid capital bases anda capital adequacy ratio of 12 percent, the Euro-pean average. All this means that bank ownerswill have to work hard this year to augment thecapital ofmost Slovenian banks. This applies inparticular to NLB, which plans to complete itscapital increase of300 million euros in June, andto NKBM, which intends to boost its capital byaround 150 million euros in the near future.www.sbr.si

Medij: Slovenian Business Report
Avtorji: Kranjc Matija
Teme: NKBM - Nova Kreditna banka Maribor
Rubrika / Oddaja: Ostalo
Datum: 29. 07. 2008
Stran: 26