Slovenian delayed 'bad bank' to start in October: central bank
(BLED) - Slovenia's much-delayed "bad bank", a key part of the eurozone member's efforts to avoid a bailout, will receive its first toxic assets next month, the head of the central bank said on Tuesday.
"We have agreed to get the first results of the stress tests for (the largest state-owned bank) NLB in October, that is when the transfer to the Bad Assets Management Company (BAMC) will start," Bostjan Jazbec told journalists.
Jazbec added on the sidelines of a conference that the results of external "stress tests" and asset quality reviews for another nine banks would be known by the end of November or in December at the latest.
He added however that "whether that will solve the credit crunch problem ... will depend more on the real economy and the capability of companies."
Slovenian banks have had to be recapitalised by the state several times after a sharp decline in the once-booming economy after the 2008-9 global financial crisis left them sitting on a mountain of bad debts.
This in turn has created concern that the small former Yugoslav republic of two million people might become the sixth member of the European single currency area to need outside help after Greece, Portugal, Ireland, Spain and Cyprus.
Parliament in 2012 approved the creation of the "bad bank" to relieve lenders of 7.0 billion euros ($9.2 billion) in risky assets and non-performing loans, with the first transfers originally scheduled for this June.
But the European Commission, fearing the true amount of distressed assets could be higher, requested a delay until the completion of an independent audit.
Prime Minister Alenka Bratusek, in office since March, has embarked on an action plan aimed at pulling Slovenia out of recession and fixing the country's public finances without needing a rescue.
Finance Minister Uros Cufer, speaking on Tuesday at the same event on the shores of Lake Bled, said he expected a progress report by the European Commission due to be published in October to be "positive".