Slovenia’s biggest state owned bank NLB generated EUR 19.7m in profit in the first half of the year, while net profit of the NLB group amounted to EUR 32.3m, the bank said on Thursday, after a supervisory board meeting. At the session, Janko Medja was appointed chief supervisor.

First sign for better times for Slovenian biggest bank?
The group’s profit after tax amounted to EUR 32.3m, while profit before reservations and impairments reached EUR 230.6m. Impairments and reservations amounted to EUR 166.5m.
The bank attributes the good result of the core company to the positive effects of repurchase of subordinated capital instruments with which the bank generated EUR 105m in net profit.

However, the bank is still burdened by non-performing loans forming EUR 164.5m in reservations and impairments, which is 82% more than the year before.

Profit before reservations and impairments amounted to EUR 215.8m, while the bank’s total assets have increased by 1% since the end of 2011, the press release says, underlining that the bank had been highly liquid the entire time.

NLB also continued divesting in non-strategic markets and managed to cut expenses by EUR 7.6m or 6% compared to the same period last year. Labour cost, which represent more than a half of the bank’s expenses, were down 9% year-on-year, while operating cost was cut by 3%.

Following a recapitalisation, the capital adequacy ratio of the bank was at 12.1% on 30 June, up one percentage point from 31 December 2011.

Tier 1 capital is at 10.6%, up 3.4 percentage points over the end of 2011, while Core Tier 1 capital was at 9.94%.

A more detailed business report for the first half of the year will be presented on Friday.

The supervisors also appointed today Janko Medja as chief supervisor. The supervisors also started the process of drafting guidelines for the appointment of a new CEO to replace Božo Jašovič, who tendered his resignation earlier this year