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Banks have lower borrowing costs

IN SPITE of the special banking levy introduced this year, most Slovak banks are reporting an increase in profits. Some banks reported profits exceeding €50 million for the first nine months of 2013. Paradoxically, this was helped not only by the growing appetite of households for buying on credit but also by the eurozone crisis, the analyst says.

IN SPITE of the special banking levy introduced this year, most Slovak banks are reporting an increase in profits. Some banks reported profits exceeding €50 million for the first nine months of 2013. Paradoxically, this was helped not only by the growing appetite of households for buying on credit but also by the eurozone crisis, the analyst says.

“One also could say that thanks to the crisis, the interest expenses of banks decreased against last year – to 18 percent,” Maroš Ovčarik, analyst of the Finančná Hitparáda website, told the Hospodárske Noviny daily. Thus, banks were able to obtain financial resources more cheaply than in 2012.

However, these favourable conditions were not enough to help some banks, as was the case with OTP Banka, whose profits slumped. A slight decline in profits was also recorded by Slovenská Sporiteľňa, which blamed legislative changes concerning fees and the bank levy introduced this year. On the other hand, Sberbank Slovensko (formerly Volksbank) managed to move out of the red.

Ovčarik noted that it is interesting that banks’ ability to acquire money more cheaply has not been reflected in all of their credit products. While mortgage interest rates have decreased in recent months, consumer credit rates “went in the opposite direction”, he told Hospodárske Noviny in early November. “However, the volume of consumer credits is markedly less than mortgages for banks.”

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