BRATISLAVA, November 30, (WEBNOVINY) – The banking sector in Slovakia bolstered its profit 48.3 percent year-on-year to EUR 637.85 million as of late October. Extraordinary, one-off income of selected banks made up a relatively big portion of this growth, the National Bank of Slovakia (NBS) reported. Decreased costs of defaulted loans in H1 positively influenced the profit a great deal. Banks also capitalized on growth of retail loans and the subsequent increase in interest income. Net interest income came up by 7.8 percent y/y to EUR 1.506 billion.
Several banks saw a modestly faster increase in costs of bad loans in Q3 and slower growth of net interest income due to an ongoing increase in the volume of deposits and ensuing growth of interest expense. Competition on the market of retail home loans contributed to slower growth of interest income, as well. Moreover, some banks reported negative development in repricing of bonds and derivatives.
Based on the central bank’s data, the banking sector bolstered its profit 101.4 percent y/y to EUR 503.65 million in 2010. Last year was marked by recovery of the financial sector, when profitability and overall financial position improved. Banks’ output grew mainly thanks to the households sector, especially owing to the recovery on the housing loans market. The banking sector, which benefited from low interest rates, now faces the risk of their repeated increase, which poses a credit risk. The segment of corporate lending posted only a minor improvement. Two years ago, banks witnessed a 50.8-percent profit fall to EUR 250.1 million.
SITA
