BANKS operating in Slovakia closed 2007 with a taxed profit of Sk17.173 billion (€510 million), which is down 3.4 percent from 2006. The National Bank of Slovakia (NBS) announced the preliminary results on February 1, the SITA newswire wrote.
Preparation for the euro has already bitten into bank profits, the Hospodárske Noviny economic daily wrote. Last year was the first year that the European single currency directly influenced banks' profits, as they spent almost three quarters more money for information systems than in 2006.
Profits of the three largest banks - Slovenská Sporiteľňa (SLSP), VÚB Banka and Tatra Banka - accounted for roughly 63 percent, or almost Sk11 billion, of the aggregate profit of the Slovak banking sector. SLSP netted Sk4.127 billion, VÚB Banka Sk3.5 billion and the taxed profit of Tatra Banka was Sk3.181 billion.
Of all of the banks, only VÚB reported a decrease in profit, down 6.9 percent, which is the result of an extremely good year in 2006, the bank explains. Tatra Banka boosted its profit by 14.3 percent, having the biggest increase of the Big Three. Its earnings from fees grew by 18 percent and went up 22 percent from loans, year-on-year. The profit of SLSP grew 10.3 percent year-on-year.
Unicredit Bank held the record of the year, when its profit soared by 71 percent year-on-year. The daily ascribes it in particular to its recent merger with HVB Bank.
People's interest in housing and records in construction production have been dominantly influencing the earnings of banks for several years.
"The volume of the loan portfolio of the VÚB group reached Sk130 billion," wrote the daily. "A robust, almost 50-percent growth, was reported in particular by loans to finance real estate. Their volume increased to Sk51.3 billion to the end of the year," VÚB spokesperson Alena Walterová told the daily.
Housing loans grew most, also in SLSP, up by 36 percent over 2007.
11. Feb 2008 at 0:00 | Compiled by Spectator staff from press reports