Slovenia's banks should do more to support private sector companies to help lift the country out of its financial and economic crisis, the central bank said on Tuesday, Reuters reports.

Slovenia's economy is creaking as its state banks are being crushed by €6.5bn of bad loans, about 18% of annual GDP. With the economy back in a second recession since 2011, Slovenia is odds-on favourite to be the next Eurozone country to ask the EU and International Monetary Fund for a bailout.

"Along with fiscal consolidation, private sector investment is a key factor in moving towards the end of financial and economic crisis," the bank said in a statement after its regular bi-monthly board meeting.

It said banks should back companies that have good businesses and seek long-term financing solutions for those which cannot repay their debts on time. Bank loans to non-financial companies fell by 10.5% on year in November. "Lack of financial support to companies which operate well but have too much debt ... is endangering possibilities for economic growth and efforts for fiscal consolidation," the central bank said.

Source: bne