* Lending to non-banking sector up by 1.3 pct in 2016
* Balance sheet assets down by 0.9 pct
* Central bank sees no overheating
(Updates with details, quotes, background)
By Marja Novak
LJUBLJANA, Feb 21 Slovenian banks' combined net
profit tripled last year, reflecting lower provisions for bad
loans and a strengthening economy although lending to the
private sector remains weak, the Bank of Slovenia said on
The bank, in its monthly report, also said Slovenian tax
income this year could exceed the target in the state budget due
to favourable economic conditions, but warned "this must not
lead to higher spending but to faster improvement in public
Slovenia hopes to reduce its budget deficit this year to 1.7
percent of GDP from 2.2 percent in 2016 and plans to cut public
debt by some 1.2 percent of GDP. The debt stood at about 80
percent of GDP last year.
The euro zone member narrowly avoided an international
bailout in 2013 when its banks nearly collapsed under a large
amount of bad loans and the government injected over 3 billion
euros to rescue them.
Some of the biggest banks are still state-owned and the
government controls about 45 percent of the banking sector,
while the rest are owned by foreign banks including France's
Societe Generale, Italy's Unicredit and
Intesa Sanpaolo, Russia's Sberbank and
Austria's Sparkasse and Addiko Bank.
They made a combined net profit of 344.3 million euros
($363 million) in 2016, up from 115.3 million, the central bank
said, adding all banks in Slovenia ended 2016 in profit.
Loans to the non-banking sector rose by 4.2 percent in
December versus the previous month while for the whole of 2016
they were up 1.3 percent. Banks' balance sheet assets fell by
0.9 percent in 2016.
The central bank also said nominal gross wages in the
private sector rose by 1.7 percent on average in 2016, in line
with the growth of productivity.
However, it warned economic growth in the future could be
limited unless productivity growth increases.
The Slovenian government expects the economy to expand by
2.9 percent this year while the European Commission sees growth
of 3 percent. The Commission said last week there was a risk of
overheating in the Slovenian economy in 2017 but the central
bank said "macroeconomic indicators do not confirm overheating
"The growth of bank lending to the private sector is weak
while the current account surplus remains high in spite of a
rise of private spending and investment. The surplus reached 6.8
percent of GDP last year," the central bank said.
($1 = 0.9484 euros)
(Reporting by Marja Novak; Editing by Susan Fenton)