SBA: Banks' Net Profit Up Almost 5% Year-on-Year in 1H25

Bratislava, 31 July (TASR) - The net profit of banks increased by 4.9 percent to €574 million in the first half of the year, the Slovak Banking Association (SBA) reported on Thursday, adding that the banks paid €311 million in taxes. Pre-tax profits fell slightly by 1.6 percent year-on-year, mainly due to higher volume of provisions, reserves and increased operating costs. "The continuing downtrend in interest rates has recently spurred growing interest in new housing loans. The first half of 2025 saw a 76 percent increase in new loans provided year-on-year, with the average interest rate falling from last year’s eleven-year high of 4.23 percent to the current figure of 3.64 percent," stated SBA. New loans to businesses also rose in demand, as their volume was up nearly 45 percent in the first six months of the year. The recovery of the credit market has had a positive impact on the performance of 22 banks. The banking sector's profitability was positively influenced in particular by an increase in net interest income and net fee income, up 6.6 percent y-o-y and 8.5 percent y-o-y respectively, also driven by commissions on the sale of non-banking products and a growing interest in loans. According to SBA, the profitability of Slovakia’s banking sector is still lagging behind the EU average and is the lowest in the Central and Eastern European region. Partly due to the impact of the banking levy, return on equity (ROE) stagnated at 10.15 percent in 2024. jrg/mcs/am