Banks’ profits up 13 percent last year

Slovakia's banking sector's profit reached €626 million last year, a 13.1 percent increase on an annual basis, according to figures released by the Slovak Central Bank on Monday. The Slovak Banking Association (SBA) explains the increase in profit to one-off factors, to wit lower provisions and reserves. Conversely, lower interest income had a negative impact on profits. Interest income, which is the main source of income of banks, contracted by €42 million despite a rise in the volume of loans, both retail and corporate, by 10.9 percent. "This is due to lower interest rates. The share of this source of income in the total operating revenues fell to 78 percent", read the statements of the Banking Association. Meanwhile, banks recorded a rise in net income from fees and other charges, as they went up by 7.1 percent and the share of defaulted loans shrank below 5 percent.