The Central Bank of Slovenia published its Financial Stability Review, judging that the overall level of risks to financial stability has risen slightly in 2025 after several quarters of stability amid heightened geopolitical and macroeconomic uncertainty, while banks’ resilience to systemic risks remains high. Macroprudential policy continues in a preventive stance focused on maintaining the banking system’s capacity to absorb domestic and external shocks. Systemic risks were assessed as low to moderate, with credit risk raised to moderate with a stable outlook for the first quarter of 2025 as non-financial corporations, particularly in manufacturing, show weaker performance and the stock of non-performing consumer loans increases, even as the NPE ratio remains stable due to strong lending. Real estate market risk remains moderate with potential to increase as constrained housing supply and lower mortgage rates support continued price rises despite fewer transactions, which could also lift risk in leasing companies. Income risk is still low but expected to strengthen over 2025 as the 2024 to 2025 fall in interest rates ends the period of exceptionally high bank income, with profitability expected to decline gradually as costs and impairments rise, while regulatory capital is expected to increase via retained 2024 earnings; funding and interest rate risks remain moderate, cyber risk is elevated, and climate risks are moderate. Four macroprudential instruments remain in place, aimed at higher bank capital, minimum credit standards, and preventing excessive growth in consumer lending.

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