Slovenia's ailing banks short of €4.78bn

Eight banks in Slovenia are short of 4.78 billion euros (6.59 billion U.S. dollars) in total, an EU-mandated stress test showed on Thursday. In its official announcement of the stress test, the Slovenian government promised to earmark 3.01 billion euros for the recapitalization of three biggest banks in Slovenia -- Nova Ljubljanska Banka (NLB), Nova Kreditna Banka Maribor (NKBM), and Abanka Vipa. The European Commission will make approval of the capital injection by the Slovenian government in the coming days, Finance Minister Uros Cufer said. Ten Slovenian banks have been under stress test following reports that the country is shouldering some seven billion euros (9.07 billion U.S. dollars) of bad loans, equal to about 20 percent of GDP of the country. However, the latest official announcement about the conditions of Slovenia's banks shows that Slovenia can bail out its banks without international aid, analysts said. Slovenia, which declared independence from former Yugoslavia in 1991, has been in growing financial difficulties since 2008 which saw the start of financial crisis in the United States and Europe. To overcome the crisis, Slovenian parliament approved in June to sell state-owned stakes in 15 companies, including flag carrier Adria Airways, and New Credit Bank Maribor (NKBM), the 2nd largest banking group in the country. Slovenian Prime Minister Alenka Bratusek has said time and again that the country does not need international aid to overcome financial crisis. "Slovenia is capable of sorting things out itself," she said.