UPDATE 1-Slovenian bank profit may halve in 2010 -c.bank

By Marja Novak BRDO PRI KRANJU, Slovenia, Nov 12 (Reuters) - The Bank of Slovenia expects profit at Slovenian lenders to be halved in 2010, having already dropped by around 50 percent in 2009, central bank governor Marko Kranjec said on Friday. He also said the central bank was "very dissatisfied" with management of the Slovenian banks in state ownership, saying poor management presented "a very big risk with operational performance" of those banks. "The profits of the Slovenian banks halved in 2009, and they will be halved once again in 2010 compared to 2009," Kranjec told reporters on the sidelines of an economic conference. Slovenia was badly hit by the global crisis due to its dependency on exports and banks have been suffering due to a rise in non-performing loans. Kranjec said the Slovenian banking system is stable but said the state often sees its ownership of Slovenian banks as "a matter of control rather than a matter of pursuing business orientation". "We are very dissatisfied with management of the banks which are in state ownership," he told the conference. He noted a capital hike by the country's largest bank Nova Ljubljanska Banka (NLB) had been postponed several times since December 2009 because the owners have not been able to reach an agreement on the issue. The government controls 48.6 percent of NLB and plans to raise its stake to a majority over the coming months. Belgian banking and insurance group KBC is NLB's second largest shareholder with 30.6 percent. NLB, which barely passed the EU stress test in July and which expects a group net loss of up to 120 million euros this year, will try once again to get shareholders' to approve a capital hike of some 250 million euros at a meeting on Nov. 25. The government also controls a majority in the country's second largest bank Nova KBM. Slovenia's banking sector is dominated by local players, though some foreign lenders including Italy's Unicredit and Intesa Sanpaolo, as well as Austria's Raiffeisen and France's Societe General have operations there. In September, Moody's downgraded Slovenia's three largest banks: NLB, NKBM and Abanka Vipa. The Bank of Slovenia said earlier in November net profit in the local banking sector reached 73.3 million euros in the first nine months, down 59.6 percent over the same period of 2009. (Editing by David Holmes) Keywords: SLOVENIA BANKS/ (marja.novak@reuters.com; Reuters Messaging: marja.novak.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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