April 26, 2017 / 3:42 PM / 4 months ago

UPDATE 2-Slovak central bank hints at raising capital buffer for banks

(Adds data on lending, background on the banking sector)

BRATISLAVA, April 26 (Reuters) - The Slovak central bank said on Wednesday it would consider at its July meeting raising the countercyclical capital buffer for banks from the currently planned 0.5 percent level, in a move that would tame lending.

All main indicators show reasons to raise the buffer, the bank said in its quarterly commentary on macroprudential policy, published on its website on Wednesday.

Fueled by economic growth and low interest rates, loans to households - including mortgages and consumer loans - leapt for a third consecutive year in 2016.

They have seen the fastest growth in the EU for five consecutive quarters, adding 13.4 percent in the final three months of 2016, the bank said.

The bank's quarterly decisions on the buffer come into effect only a year later, meaning a possible decision in July to increase the buffer would not be effective until August 2018.

The central bank opted in 2016 to become the first in the euro zone to introduce the countercyclical capital buffer to rein in lending. Banks must meet the 0.5 percent requirement from August this year.

Slovakia's banks, including CSOB, Postova Banka, Slovenska Sporitelna, Tatra Banka and VUB are largely foreign-owned.

They have held up well in recent years, backed by low loan-to-deposit ratios, relatively high capital levels and an economy that has outpaced euro zone peers.

The sector capital adequacy average has increased from 17.8 percent in 2015 to 18.0 percent in 2016. (Reporting by Tatiana Jancarikova; editing by Andrew Roche)

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