LJUBLJANA, June 14 (Reuters) - Slovenian banks have become more robust and better able to withstand economic shocks three years after their bad loan problems almost pushed the country towards an international bailout, the Bank of Slovenia said its June report on financial stability on Wednesday.
"Banks operate in favourable macroeconomic environment which is increasing the confidence of companies and households with stability and forecasts of further (GDP) growth," the bank said.
"In general the sensitivity of banks to systemic risks decreased in 2016 which gives a good basis for a revival of credit activity in this year," it said.
But the bank also warned that low interest rates would put the banks' profitability under pressure.
It also said banks needed to watch out for risks from a maturity mismatch that could result from them holding fewer long-term deposits as a result of low rates.
The bank said the amount of loans to companies has been growing since December 2016 after falling for several years, which it said signalled the start of a new investment cycle.
Bank lending had been shrinking since 2013 when the government had to pour more than 3 billion euros into domestic banks to prevent them from collapsing under a pile of bad loans.
Slovenia returned to growth a year later and the central bank expects GDP growth of 3.5 percent this year and 3.1 percent in 2018, boosted by investment, domestic spending and exports.
In March, loans to non-banking sector rose by 3 percent year-on-year while the amount of bad loans in local banks fell to 5.2 percent of all loans from 5.5 percent in December, the central bank said in a report last month.
Some of the biggest banks in Slovenia are still state-owned and the government controls about 45 percent of the banking sector.
The rest are owned by foreign banks and investors, including U.S. investment company Apollo Global Management, Societe Generale, UniCredit and Intesa Sanpaolo, Russia's Sberbank and Austria's Sparkasse and Addiko Bank. (Reporting by Marja Novak. Editing by Jane Merriman)