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Slovenia can cover banks' bad loan shortfall if needed - paper
July 17, 2013 / 9:08 AM / 4 years ago

Slovenia can cover banks' bad loan shortfall if needed - paper

BERLIN, July 17 (Reuters) - Slovenia has the financial means to help its banks should they need more capital than previously expected, Prime Minister Alenka Bratusek said in a newspaper interview.

Bratusek said in an interview with Germany’s Handelsblatt published on Wednesday she hoped the sum of bad loans in Slovenian banks would not surpass the central bank’s estimate of 7 billion euros.

“If the sum should turn out to be somewhat higher, then the government would be ready to cover the extra capital requirements. We have the necessary financials means,” she said.

Slovenia’s banks, mostly state-owned, are weighed down by bad loans from the country’s weak economy, which could lead the former Yugoslav republic to seek a bailout, although Bratusek has insisted it can manage without one.

Bratusek, who visited German Chancellor Angela Merkel in Berlin last Friday, was asked whether Slovenia would cover a significantly higher shortfall.

“I don’t want to speculate about the results of stress tests. I don’t think the needs will be significantly higher. If that was the case, then we would also have to meet it.”

Banking analysts are concerned that the bank stress tests may show the size of bad loans is even higher than the official figures compiled by the central bank and the banks themselves. (Reporting by Gernot Heller; writing by Alexandra Hudson. Editing by Jane Merriman)

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