LJUBLJANA, Jan 22 (Reuters) - Slovenia's banks should do more to support private sector companies in order to help the country overcome its financial and economic crisis, its central bank said on Tuesday.
Slovenian banks, mostly state-owned, are nursing bad loans worth 19 percent of annual economic output and are at the heart of speculation that the euro zone country might need an international bailout later this year.
The country's export-dependent economy has been battered by a collapse in demand for its goods from other European Union states.
"Along with fiscal consolidation, private sector investment is a key factor in moving towards the end of financial and economic crisis," the bank said in a statement after its regular bi-monthly board meeting.
It said banks should back companies that have good businesses and seek long-term financing solutions for those which cannot repay their debts on time.
Bank loans to non-financial companies fell by 10.5 percent year-on-year in November and were 1.5 billion euros down in the first 11 months of 2012, the central bank said. Bad loans in local banks rose to 14.4 percent of all loans in November from 14.2 percent in September.
"Lack of financial support to companies which operate well but have too much debt ... is endangering possibilities for economic growth and efforts for fiscal consolidation," the central bank said.
The banks are nursing some 6.7 billion euros ($8.9 billion) of bad loans.
Slovenia managed to raise money through a bond sale in October, averting a bailout for at least six months, but Governor Marko Kranjec told Reuters last week that the country's current political crisis could threaten its ability to finance itself on the debt markets.
The conservative government of Prime Minister Janez Jansa is expected to lose its majority in parliament on Wednesday, when a junior coalition party, the Civic List, is expected to quit over corruption allegations against Jansa that he has denied.
The government plans to establish a new state institution by April that would take over bad loans from state-owned banks in order to ease the credit crunch and enable bank privatisation. ($1 = 0.7510 euros) (Reporting by Marja Novak; Editing by Ruth Pitchford)