SBA: Net profits of Slovak banks down by 27% to €488 million last year

The net profits of banks active in the Slovak market went down by more than 27 percent year-on-year to €488 million in 2012, the Slovak Banking Association (SBA) announced on Thursday, January 31, citing preliminary data provided by the National Bank of Slovakia (NBS), the country's central bank.

The net profits of banks active in the Slovak market went down by more than 27 percent year-on-year to €488 million in 2012, the Slovak Banking Association (SBA) announced on Thursday, January 31, citing preliminary data provided by the National Bank of Slovakia (NBS), the country's central bank.

"The main cause lies in the decreasing revenues from the bank's main activities (interest incomes) and, compared to European standards, a disproportionately high bank levy. For the first 12 months, banks paid €170 million to the state via the bank levy, which represents almost 0.3 percent of the sector's balance sheet total," the SBA said, adding that the effects of the bank levy are 6 or even 10 times higher in Slovakia than elsewhere in the eurozone.

The main source of banks' profits, interest income, declined for the first time ever – by 2.7 percent year-on-year in 2012. Net fee and commission income, which is the second most important source of profits, remained at the same level. The balance sheet total of Slovak banks increased by 4 percent year-on-year, in particular thanks to new loans. The volume of new housing mortgage loans fell by 4 percent, while the volume of consumer credits was up by 17 percent. Overall, credits provided to companies dropped by 3 percent compared to 2011, partially as the result of lower demand, the SBA stated, as quoted by the TASR newswire.

Source: TASR

Compiled by Zuzana Vilikovská from press reports
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