He also said the European Central Bank's (ECB) monetary policy was yielding results, adding the eurozone could get close to its inflation goal in 2019.

Dolenc, who is deputy governor, took over running the bank from Bostjan Jazbec last week after Jazbec resigned as governor to take on a position in the EU's Single Resolution Board. He will lead the bank until the new governor is named in autumn.

Dolenc will also take Jazbec's place on the ECB's governing council although the ECB has not yet determined whether he will be able to vote in the council.

"The situation in the banks is very good, they have good business results, enough capital, excellent liquidity," Dolenc told Reuters in his first interview after taking over.

"But our key goal is that the banks continue reducing non-performing loans, we are pushing them towards that so that banks will be better prepared for potential future crisis," Dolenc said.

He added that banks should in the long run reduce bad loans to below 4 percent of all loans from 5.6 percent at present.

In 2013 Slovenia only narrowly avoided an international bailout as the government had to bail out several banks that almost collapsed under a large amount of bad loans which represented about a fifth of all loans in local banks.

The country returned to economic growth a year later and the government expects the economy to expand by 5.1 percent this year, boosted by exports and investments, versus 5 percent in 2017.

Dolenc also said that bank consolidation can be expected in Slovenia in the coming years as banks need to further reduce costs to remain competitive.

At present there are 15 banks in the country with two million people. The government still controls about 40 percent of the banking sector while other banks are mostly owned by foreign banks and investors.

Those include US investment firm Apollo Global Management, France's bank Societe Generale, Italy's Unicredit and Intesa Sanpaolo, Russia's Sberbank and Austria's Sparkasse and Addiko Bank.

ECB REACHES GOAL

Dolenc said he believed ECB's policy was successful: "The European monetary policy has reached its goal which is reflected in macroeconomic indicators, like economic growth, employment, spending and also inflation."

He said that a fall in eurozone year-on-year inflation in April to 1.2 percent from 1.3 percent in March was seen as a one-time move.

"We are well on our way of reaching our goal to bring inflation near but below 2 percent ... We could get near to that goal during 2019 or towards the end of 2019," he said.

He said it was too early to say whether he would be interested in running for the position of central bank governor, which has a six-year mandate.

President Borut Pahor plans to nominate a candidate by Sept. 19, following which the candidate would have to be confirmed by parliament.

(Reporting By Marja Novak)

By Marja Novak