Huge loans of Poštová Banka to Cyprus

Poštová Banka lent 549 million Euro to clients in Cyprus. It is the fifth biggest bank in Slovakia but not even the largest banks here provided so much money in loans. The bank is controlled by the J&T Group and a minor stake is in the hands of the group Istrokapital. The Sme daily observes that it's rather unusual for a Slovak bank to lend such sums to entities in Cyprus. Postova banka's conduct is reportedly being dealt with by the Slovak central bank (NBS). "Growing exposure to Cyprus could present a possible increase in risk potential," warned the National Bank in its report on financial stability in May. Loans provided to entities in Cyprus are viewed as risky, as the island country provides a high level of anonymity to entrepreneurs. SME daily adds that consequently there is a high risk that the bank will provide favourable loans to affiliated individuals - its stakeholders and/or managers. Such loans aren't against the law, but they are subject to stringent regulations. The National Bank of Slovakia sent another inspection team to the Poštová Banka, hoping to find out whom and for what purpose the bank lent that much. When approached by the newspaper, Poštová banka declined to explain why it decided to provide such a volume of loans to clients from Cyprus. "We don't make our loan provision strategy public due to competition," said Poštová banka spokesperson Anna Tkacova.