SBA: Slovak Banking Sector's Profit Down 2.1 percent to €1.058 billion Last Year

Bratislava, 30 January (TASR) - According to preliminary data, the net profit of the Slovak banking sector fell to €1.058 billion last year, down by 2.1 percent from 2024, the Slovak Banking Association (SBA) reported on Friday, adding that this primarily reflects a significant increase in provisions to cover future risks and continuing growth in operating costs, mainly in the field of IT, security and regulation. "The results of banks in 2025 show that the sector is operating in an increasingly challenging economic and regulatory environment. Despite this, banks continued to provide loans to both households and businesses, but the growing level of risks and costs is increasingly being reflected in profitability. That's why it's important to hold an expert discussion on the sector's tax and regulatory burden in a way that doesn't jeopardise its stability or ability to finance the economy," stated SBA executive director Marcel Klimek. The banking sector's profit in 2025 was significantly affected by growth in provisions, which banks are obliged to create under International Financial Reporting Standards (IFRS) as reserves to cover future credit losses. Net creation of provisions reached €231 million, which is a big increase from the previous year, when it hit a five-year low. This development reflects deteriorating expectations regarding macroeconomic developments, geopolitical risks, trade uncertainty and the effects of fiscal consolidation. Bank profits were also negatively affected by rising operating costs - by 5.7 percent year-on-year (y-o-y) to €1.685 billion. In addition to labour costs, banks recorded a significant rise in spending on IT infrastructure and its administration, which grew by 12.6 percent to make up some 14 percent of the sector’s total operating costs. These are primarily investments in cyber security, customer protection and compliance with regulatory requirements. Net interest income remained the main pillar of profitability, rising by 7 percent in 2025 to €2.616 billion. The growth was supported by increased demand for loans, with banks providing 64 percent more new housing loans, while the average interest rate fell to 3.4 percent. ko/df