(Adds bank comment)
BRATISLAVA, June 11 (Reuters) - The Slovak central bank has raised its countercyclical capital buffer for banks by half a percentage point to 2.00%, valid from August 2020, officials said on Tuesday, taking a further step to increase the resilience of the banking sector and curb fast lending.
Slovakia is among a handful of European countries applying the extra charge on banks as it seeks to hold down risks from high loan growth, especially in a hot housing market.
Neighbouring Czech Republic already has a similar rate level coming into effect while Germany’s Financial Stability Board at the end of May suggested a buffer of 0.25% for its banks.
Lending in Slovakia, the first euro zone country to apply the buffer requirement, has been growing at or near double-digit levels.
Vladimir Dvoracek, head of the central bank’s financial oversight department, said cyclical risks remained and that despite a certain slowdown in household loan growth, the lending rise remained “excessive”.
“The Slovak bank’s capital adequacy is very good, over 18%, so we can say that banks already hold certain buffers voluntarily,” he added.
The countercyclical buffer rate is already due to rise to 1.50% from 1.25% from Aug. 1 this year.
The latest decision is subject to European Central Bank consultation under which the ECB assesses the rate and can, if needed, apply a higher requirement.
Slovakia’s banks, including CSOB, Postova Banka, Slovenska Sporitelna, Tatra Banka and VUB , are largely foreign-owned and have avoided troubles seen by other banks in Europe in the decade after the global financial crisis.
“Our capital adequacy at the end of 2020 is seen at a level two percentage points higher than the level required by the regulators for our bank. That means the 0.5-point raise as of August 2020 will leave us with enough room to finance our clients,” said Slovenska Sporitelna, the country’s biggest bank.
Reporting by Tatiana Jancarikova; Writing by Jason Hovet; Editing by Andrew Cawthorne and Gabrielle Tétrault-Farber