BRATISLAVA, March 30, (WEBNOVINY) — The banking sector in Slovakia closed the first two months of this year with a taxed profit of EUR 94.9 million, down 12.5 percent y/y. Net interest income rose 6.7 percent to EUR 303.9 million. Formation of provisions for bad loans swelled 68.2 percent to EUR 45.7 million. The new bank levy likely negatively affected profit, too.
Several banks commented that approving a special bank levy at 0.4 percent of selected bank liabilities is bad news for the market. It may lead to restrictions on loan provision and worse availability of funding. Furthermore, a number of regulatory measures will reduce the return rate of the banking sector’s capital. In the case of several banks, this may lead to revaluation of effectiveness of conducting bank business in Slovakia and subsequently to acquisition opportunities, in particular in the case of smaller players.
The British HSBC bank already announced its plan to withdraw from the Slovak market. It is expected to wind down its activities in the country by the end of the third quarter of this year. Bank houses in Slovakia bolstered their net profit by over one-third last year. According to preliminary non-audited results released by the Slovak Banking Association (SBA) and citing data of the National Bank of Slovakia (NBS), net profit of the Slovak banking sector accounted for EUR 674 million, up more than 34 percent y/y. Portion of one-off revenues on the profit was considerable since net of one-off revenue, taxed profit reached EUR 503 million, close to the 2010 result.
The volume of new loans extended by banks hit a new high last year, exceeding EUR 3.8 billion. For the sake of comparison, banks provided housing loans in value of EUR 3.2 billion in 2010. The volume of all loans stood at EUR 36.4 billion in late December 2011, up 8.7 percent y/y.
SITA
