Fico: Bank Levy Should Go Up from Next Year

Smer-SD head Robert Fico (stock photo by TASR)

Bratislava, November 5 (TASR) – The bank levy should increase as of next year from 0.2 percent to 0.4 percent from the value of banks’ liabilities lowered by the amount of equity, with the levy expected to channel about €120-130 million into the state budget next year, said head of the senior governing Smer-SD party Robert Fico on Tuesday.

This issue should be discussed by the Government on Wednesday (November 6). Fico announced that if this is not the case, MPs will submit their own proposal to Parliament. According to Fico, the state must respond to the increasing profitability of banks as well as fees. Fico explained that in recent years the banking sector’s profitability has increased from €560 million in 2014 to €639 million last year and it should reach approximately €700 million this year. “This is not a profit banks would earn by lending. The only reason is the new fee policy of banks. We have registered that a massive increase in fees has occurred since January 1, 2018, with the rise ranging from 20 percent to 233 percent. That’s nonsense,” said Fico.

Therefore, according to him, the state must respond to this situation. “Despite the introduction of the special bank levy in 2012, the banking sector shows above-average profitability in Slovakia compared to other banking sectors in the European Union,” Fico says.
According to Fico, there is also an agreement within the coalition to increase the bank levy. The Smer-SD head pointed out that this measure is not adopted because of next year’s budget.

However, the Slovak Banking Association (SBA) pointed out last month after the Coalition Council provided its statement, that the extension of the levy would jeopardise the financial stability of the sector. Although, according to the association, it is one of the most stable in the European Union, the levy on banks is among the highest. Declining interest margins as well as a decline in profitability of banking houses in Slovakia are also risks.