LJUBLJANA (Reuters) - Net profit at Nova Ljubljanska Banka (NLB) (NLBR.LJ) tumbled 68% to 18.3 million euros ($19.7 million) in the first quarter of 2020 as Slovenia’s largest bank set aside money to cover bad loans caused by coronavirus crisis, it said on Thursday.
NLB said its bad loans stood at 393.5 million euros at the end of March, up from 374.7 million at the end of 2019. They represented 4.6% of the bank’s total loans, according to the European Banking Authority definition.
It made 28.3 million euros of bad loan provisions in the quarter due to “the outbreak of COVID-19 and consequent adjustments of macroeconomic scenarios”.
Net interest income fell by 3% year-on-year, while balance sheet assets totalled 14.3 billion euros, up by about 1% from the end of 2019.
NLB said the pandemic had led to a pick up in customers using digital banking, which presented an opportunity for the business, and added it expected to complete its acquisition of Serbia’s Komercijalna Banka by the end of this year.
“The changes in the economic environment have not affected NLB’s ambition to strengthen its position in the Southeastern Europe,” it said.
NLB said last month it was not planning to pay a dividend this year due to the pandemic.
The lender, in which the state holds a 25% stake, operates banks in Slovenia, Serbia, Bosnia, Kosovo, North Macedonia and Montenegro.
Slovenia has so far reported 1,464 coronavirus cases and 103 deaths. The government expects GDP to fall by at least 8% this year due to a lockdown, which started in the middle of March, to contain the disease. The government has been gradually easing the lockdown since April 20.
Slovenia’s export-oriented economy grew 2.4% in 2019.
Reporting By Marja Novak; Editing by Mark Potter