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Banks to compete for Sk30 billion in ‘iron reserves’ kept by Slovaks

Slovakia's residents are estimated to hold about Sk25 billion to Sk30 billion (€830 to €996 million) in so-called iron reserves in cash at home.

Slovakia's residents are estimated to hold about Sk25 billion to Sk30 billion (€830 to €996 million) in so-called iron reserves in cash at home.

UniCredit Bank analysts anticipate that people's deposits in banks should grow at the turn of the year by this amount because of the planned adoption of the euro. The director of UniCredit Bank’s retail banking division, Monika Kohútová, noted that mainly older people living in small towns and villages prefer to hold cash. The bank's analysts expect euro adoption will decrease the portion of their finances which people hold in cash.

Last year, Slovak households had 49 percent of their financial assets in bank accounts, while about 15 percent were in cash. The cash portion is expected to drop to eleven percent this year, and bank deposits are expected to swell to 51 percent. Overall cash in circulation exceeded Sk140 billion (€4.647 billion) in 2007, according to UniCredit’s data. A total of Sk181 billion (€6.008 billion) was deposited in current accounts and Sk306 billion (€10.16 billion) in term deposits.

According to Kohútová, conservative forms of saving still dominate in Slovakia. Bank analysts assume that the portion of cash held as a portion of financial assets by Slovak households will shrink markedly from January 1 next year. As the end of the year approaches, banks are intensifying their efforts to acquire this finance from people by offering them various advantages such as long-term deposits with higher yields. SITA

Compiled by Zuzana Vilikovská from press reports
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