The Central Bank of Slovenia published its latest Report on bank performance with commentary, finding the banking system performed well in the first four months of 2025 despite heightened international uncertainty and weaker economic indicators. Profitability declined as lower European Central Bank key interest rates reduced net interest income, while net non-interest income grew moderately. Deposits from the non-banking sector increased, driven mainly by stronger household inflows, although some savings were redirected into government bonds aimed at the public; falling deposit rates left the average maturity broadly unchanged and sight deposits continued to dominate. Lending to the non-banking sector rose 7.4% year on year in April, led by household lending up 6.5% year on year (1.7% in the euro area), while lending to non-financial corporations was broadly flat year on year and below the euro area average. Asset quality remained stable overall with the non-performing exposure ratio at 1.0% in April, though the ratio for non-financial corporations increased to 2.0% from 1.8% in December.
Central Bank of Slovenia 2025-06-20
Central Bank of Slovenia reports stronger household lending and stable asset quality as bank profits ease on lower rates
The Central Bank of Slovenia's report shows the banking system performed well in early 2025 despite international uncertainty, with profitability declining due to lower European Central Bank interest rates. Non-banking sector deposits increased, driven by household inflows, while lending rose 7.4% year on year, led by household lending. Asset quality remained stable, although the non-performing exposure ratio for non-financial corporations slightly increased to 2.0%.