Central Bank of Slovenia says bank resilience remains high as lending growth strengthens and risks stay elevated

The Central Bank of Slovenia has published its latest report on bank performance, covering the first four months of the year, and said the banking system remains in relatively good condition with high resilience and a stable outlook. The main sources of uncertainty remain elevated macrofinancial risk and cyber risk. Household deposits continued to rise, deposits from non-financial corporations fell in a pattern the central bank described as seasonal, and year-on-year lending growth to the non-banking sector strengthened further. Profit was lower than a year earlier, although it remained above its long-term average on an annual basis. Sight deposits still account for most deposits held by the non-banking sector. Household deposits recorded solid inflows apart from March, when savers used funds to buy a government retail bond. Corporate deposits declined over the first four months as firms repaid loans and made seasonal payments including dividends and annual leave allowances. Year-on-year growth in loans to the non-banking sector reached 10.7%, the highest since November 2022 and well above the euro area average of 3.7%, driven mainly by household borrowing, with new housing and consumer loan volumes increasing. Lending to non-financial corporations also edged up, particularly in recent months, while loans to non-residents also contributed to growth. Asset quality was broadly unchanged from the end of 2025, with the non-performing exposures ratio stable at 1.6%. Pre-tax profit for the first four months fell from a year earlier because of lower net income and higher impairments and provisions, while solvency and liquidity remained sound.