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By Marja Novak
LJUBLJANA, May 24 (Reuters) - Slovenian banks reduced the amount of loans with repayment delayed by 90 days or more to 8.2 percent of all loans in March from 8.5 percent in February, the Bank of Slovenia said in a report on Tuesday.
The central bank said local banks made a joint net profit of 129.7 million euros in the first quarter, up from 70.4 million a year earlier, although their balance sheet assets fell by 3.1 percent year on year.
Bad loans at local banks represented almost a fifth of all loans in 2013, pushing the country towards an international bailout, which the government averted by pouring more than 3 billion euros into stricken lenders in that year.
Total loans continued to shrink, falling 8.2 percent year-on-year. Loans to non-financial institutions fell by 12.8 percent while loans to households were up by 0.5 percent year-on-year.
The central bank said Slovenia’s need for further fiscal consolidation “will hinder economic growth at least in the medium-term”.
Slovenia plans to reduce its budget deficit to 2.2 percent of GDP this year from 2.9 percent in 2015, before gradually bringing it down to zero by the end of 2020, in line with European Commission demands.
The government expects the economy to expand by 1.7 percent this year versus an expansion of 2.9 percent in 2015 due to lower export growth and lower growth of public investment spending. (Reporting by Marja Novak; Editing by Jason Neely and Alexandra Hudson)