Ten Slovenian banks are put to stress tests that consist of a comprehensive asset quality review, bottom up stress tests and top down challenge, the central bank revealed on Wednesday.
Apart from three biggest banks in Slovenia -- Nova Ljubljanska Banka (NLB), Nova Kreditna Banka Maribor (NKBM), and Abanka Vipa, the banks also subjected to the tests are Gorenjska banka, Banka Celje, Unicredit banka Slovenije, Hypo Alpe Adria Bank, Raiffeisen bank, Probanka and Factor banka.
All these banks combined represent about 70 percent of the Slovenian banking system, the Slovenian Press Agency quoted Banka Slovenije, the central bank, as reporting.
Bottom up stress tests include the assessment of the bank's capacity in terms of loss absorption, of the bank's losses from performing, non-performing and restructured claims, and of the bank's solvency position under baseline and adverse scenarios in line with the surplus or deficit of the bank's loss absorption capacity.
The bottom up stress tests are to assess potential capital needs of the Slovenian banking system and individual banks in a baseline and adverse scenario, Banka Slovenije said.
The entire review of Slovenian banking system is being supervised by Slovenia's government and central bank, and experts from the European Commission, European Central Bank and the European Banking Authority.
"It was crucial that the assessments are done according to the highest standards," Eurogroup leader Jeroen Dijsselbloem said during his visit to Slovenia in October.
The assessments, due to be released by the end of the year, must be accurate and credible so that Slovenian people and international investors can "know for sure that the banks are in a healthy state in the future," he said.