Domestic share of bank capital at only 5%

The domestic share of capital in Slovak banks is declining and at the end of the first quarter represented only 5.05 percent. Foreign companies are thus holding an increasingly high share of capital in banks in Slovakia. While according to statistics of the National Bank of Slovakia at the end of 1998 domestic capital in commercial banks accounted for about 63%, in late 2001 it was only at 38%. The reason for this was the privatization of the Slovak banking sector in the late 1990s and the beginning of the millennium. Slovenska sporiteľňa's chief economist Maria Valachyová said that the privatization of banks was necessary for the capitalization of the entire sector. "Banks were in bad shape at the end of the era of Prime Minister Vladimir Meciar. It was necessary to bail them out, write off bad debts, and by their sale add new capital to them. Together with the new administration, credit and risk standards, the Slovak commercial banking sector got into very good shape, and not even during the financial crisis from 2008 to 2009 did it need any state aid," she said.