Page 114 - SE Outlook Regions 2022

Retail sales also grew compared to pre-pandemic October 2019, by
20.1%. The annual growth was primarily a consequence of the increase
in retail trade with automotive fuel (by 97.2%), but growth was also
significant in retail trade of non-food products (by 13.1%) and food
products (by 7.6%).

3.11.2 Banks

The net profit of Slovenian commercial banks plunged by an annual
38.3% to €324.4mn in the first nine months of 2021, the Bank of
Slovenia said. This was a result of lower non-interest income.

The central bank said that the banking system’s balance sheet declined
by €316.4mn in September and amounted to €47.5bn at the end of the
month, up by an annual 9.1%.

Household lending continued in September, as in previous months, to
be driven primarily by housing loans. Corporate lending remains weak,
although lending to non-financial corporations in September 2021 was
slightly larger than in the same month in 2020. The non-performing
exposure (NPE) ratio in September remained unchanged from the
previous month, but the decline in the share of the credit portfolio in the
stage of increased credit risk has slowed in recent months. Pre-tax
profit was relatively high, but was driven primarily by the net release of
impairments and provisions. The ratio of net impairments and
provisions to gross income has stayed at its long-term average for
some time now. The future sustainability of the banks’ profit generated
in this way remains questionable. The banking system is maintaining a
good capital position and liquidity position. The total capital ratio is
slightly below the euro area average, while the CET1 ratio is above the
euro area average. Liquidity indicators also remain high, despite a
slight decline in September.

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