THE SLOVAK banking sector boosted its stability in the first six months of 2010, according to a financial sector analysis by the National Bank of Slovakia (NBS), the country’s central bank. Improvement of the situation on the financial markets in the USA and Europe significantly contributed to the stabilisation.
“Stabilisation on financial markets in the USA and Europe influenced dissipating insecurity and bolstering liquidity,” the SITA newswire quoted Vladimír Dvořáček, the director of the NBS’ financial market supervision department, as saying. “Negative impacts gradually surfaced, especially regarding the debts of some EU countries. This was mostly translated into a decrease in bond prices.”
Banks in Slovakia have strengthened their financial position and their profits went up by more than one-third after the slump in profitability in 2009, Dvořáček said. The central bank expects this trend to continue in the second half of this year.
According to the NBS, banks in Slovakia are still behaving somewhat conservatively and activities they perform are perceived as less risky. Nevertheless, some banks invested in riskier assets including Greek bonds, which accounted for 4 percent of the overall volume of bonds held by the entire banking sector at the end of July, representing about €600 million.
4. Oct 2010 at 0:00 | Compiled by Spectator staff