Foreign capital participation
Within the low amounts of foreign direct investment inflow to Slovakia, the banking sector (including the financial sector) shared the highest portion in 1993-1994; in 1995 the share of banking sector fell to third place (behind the industry and trade sectors).
As regards the foreign capital participation in the subscribed banking capital in Slovakia, it developed rapidly compared with the very low starting amounts. While the participation of foreign investors in the Slovak banking sector represented 13.6 per cent of the total banking equity in Slovakia as of June 30, 1993, their share amounted to 32.7 per cent as of March 31, 1995. The prevailing part of this increase occurred during 1995; in 1994, the growth in equity capital as a whole was rather moderate.
| SKK million | |
|---|---|
| Banks and branch offices of foreign banks * | 30,037.5 |
| of which | |
| domestic equity subscribed capital | 18,150.4 |
| foreign equity subscribed capital | 11,887.1 |
| of which | |
| Czech Republic | 4,919.1 |
| Austria | 2,270.6 |
| The Netherlands | 1,978.0 |
| Germany | 763.6 |
| USA | 500.8 |
| France | 450.0 |
| Great Britain | 370.1 |
| Italy | 368.6 |
| Russia | 236.1 |
| Cyprus | 20.5 |
| Switzerland | 9.8 |
Foreign capital participation was reported in 13 domestic commercial banks operating as of June 30, 1996. During the first half of 1996, in accordance with the amended Banking Act, the NBS granted a licence to one bank with foreign capital participation to perform banking activities.
At the end of the first half of 1996, there were recorded eight branches of foreign banks in the Slovak banking sector. In this period, two branches of foreign banks were deprived of their licence to operate as a bank.
Banks with foreign capital participation (banks with foreign capital participation under 10 per cent are classified as banks with no foreign participation) are mainly medium-sized entities with equity capital between 0.3 billion SKK to 1 billion SKK. The equity participation ranges from 13.5 per cent to 100 per cent.
For the equity subscribed capital of Banks by country see chart 2.
Apart from the amounts invested, the participation of foreign capital in Slovak banks plays an important role in extending the required know-how in emerging specialised banking activities such as building savings or mortgage banking. Both the Slovak building savings banks (Stavebna sporitelna VUB-Wustenrot as, Bratislava, and Prva stavebna sporiterna as, Bratislava) were established with the aid of Austrian and German capital participation, and the licensed mortgage bank Hypo-bank Slovakia as, Bratislava, which began operations on 1 July 1996, is fully controlled by German capital.
The amounts and shares of foreign capital participation in the Slovak banking sector by the weight of equity capital are given in table 9.
| licence granted | equity capital subscribed (SKK million) | capital structure in % | Origin | ||
|---|---|---|---|---|---|
| SR | foreign | ||||
| Banks without important foreign capital participation (below 20%) | 1,909.0 | ||||
| Istrobanka as, Bratislava | 22/6/1992 | 1,000.0 | 90.00 | 10.00 | Austria |
| Postova banka as, Bratislava | 15/12/1992 | 909.0 | 91.80 | 8.20 | Austria |
| Banks with important foreign capital participation (20-50%) | 2,090.7 | ||||
| Devina banka as, Bratislava | 1/6/1992 | 740.0 | 68.10 | 91.90 | Russia |
| Slovenska polnohospodarska banka as, Bratislava | 21/6/1990 | 1,850.7 | 63.05 | 1.95 | Czech Republic |
| 20.00 | Great Britain | ||||
| 15.00 | Italy | ||||
| Stavebna sporitelna VUB-Wustenrot as, Bratislava | 17/5/1993 | 500.0 | 50.00 | 30.00 | Austria |
| 20.00 | Germany | ||||
| Banks with prevailing foreign capital participation (over 50%) | 4,578.5 | ||||
| Bank Austria (SR) as, Bratislava | 21/4/1995 | 500.0 | 100.00 | Austria | |
| Citibank (Slovakia) as, Bratislava | 16/8/1995 | 500.0 | 100.00 | USA | |
| Creditanstalt as, Bratislava | 20/4/1994 | 515.5 | 100.00 | Austria | |
| Credit Lyonnais Bank Slovakia as | 22/2/1993 | 500.0 | 10.00 | 90.00 | France |
| Komercni banka Bratislava as | 21/4/1995 | 100.00 | 91.90 | Czech Republic | |
| Ludova banka as, Bratislava | 1/7/1991 | 500.0 | 4.20 | 77.60 | Austria |
| 18.20 | Italy | ||||
| Prva stavebna sporitelna as, Bratislava | 1/10/1992 | 500.0 | 35.00 | 32.50 | Germany |
| 32.50 | Austria | ||||
| Tatra banka as, Bratislava | 1/10/1990 | 502.2 | 36.99 | 63.01 | Austria |
| Hypo-bank Slovakia as, Bratislava | 16/8/1995 | 560.8 | 100.00 | Germany | |
| Branches of foreign banks | 6,519.0 | ||||
| Agrobanka Praha as, Branch Office, Banska Bystrica | 22/1/1993 | 500.0 | 100.00 | Czech Republic | |
| Banka Hana as, Brno, Branch Office, Nitra | 3/2/1993 | 500.0 | 100.00 | Czech Republic | |
| Ceskoslovenska obchodna banka as, Praha, Foreign Branch Office for the SR | 8/4/1993 | 2,820.0 | 100.00 | Czech Republic | |
| ING Bank NV Branch Office, Bratislava | 16/6/1993 | 2,197.7 | 100.00 | The Netherlands | |
| Moravia banka as, Frydek Mistek, Branch Office, Zilina | 4/3/1993 | 501.2 | 100.00 | Czech Republic | |
Paper elaborated on behalf of Ms. Karen S. Vorst, PhD, Associate Professor, University of Missouri-Kansas City, College of Art and Sciences, Department of Economics to be included in a book on the developments in transitional countries of Central Europe Bratislava, May 1997
About Authors:
Viktoria Muckova, PhD, Director of the Department for Banking and Financial Products, IMFS
Zora Kominkova, PhD, Deputee of the Director of the Department for Macroeconomic and Monetary Studies, IMFS
