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WorldJuly 1 2013

Slovak banks struggle to maintain success story

Slovakia's banks are a rare bright spot in a crisis-strewn eurozone with their strong balance sheets, but they are not immune from falling external demand and tax hikes.
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Slovak banks struggle to maintain success story

Slovakia's banks saw their profits shrivel by almost one-third in 2013 thanks in large part to the impact of the economic crisis, except that in this case the hit did not come directly from a lacklustre economy expanding at only 2%, but rather because of governmental determination to reduce the country's deficit.

In an effort to bring the deficit to below 3% of gross domestic product (GDP) in 2013 (down from 4.8% in 2012), the government of premier Robert Fico imposed an extraordinary banking tax set at 0.4% of liabilities which raised €170m from the sector, or 35% of its aggregate profits.

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