Slovenská sporiteľňa achieved profit after tax in the amount of EUR 228.1 million in 2021. It is one of the largest taxpayers, introduces digital and ecological innovations. It is successful thanks to its employees and clients

“Our success goes hand in hand with the success of the Slovak people and companies. Our success is only possible thanks to our employees and clients. As a result, we are among the top taxpayers in our country. We have made three specific commitments that we wish to meet by 2025. Our unique financial education program FinQ is educating young people. We care for financial health, and in October 2021 our parent company Erste Group even became a founding signatory to the UN Initiative for Financial Health.

We are the only bank in Slovakia having a program for start-ups, to whom we provide tailor-made affordable solutions accompanied by financial or business education and mentoring. As part of our social banking, we provide financial assistance to non-profits and social economy entities. Through our foundation, we support communities and green innovation. Last but not least, together with Erste we are committed to pursuing our business in a climate-neutral way and achieving zero emissions in the loan and investment portfolio.

This is all great but these days we have more important things to deal with. The war that also directly affects us, threatens to destroy everything we believe in. Peace, democracy, prosperity. I really hope that the conflict will be over soon. We stand by the people not only in Ukraine but also in our region and we want to help them in any way possible. We will donate funds through our foundation, and we will try to lend a helping hand to all those directly at risk. If only we could do more,” says Peter Krutil, CEO of Slovenská sporiteľňa.   

WE ARE Beneficial for the country

We have long been one of the largest taxpayers in Slovakia. Since 2017, our worst ranking in the chart published by Finstat was sixth place. In 2020, we took third place with nearly EUR 53 million, and first place among non-monopoly companies. We do not know our ranking for last year, with a tax payment of EUR 65.3 million, though, we should again be among the top payers.

We act to do good

As a responsible leader, we help create a future we can all look forward to. Therefore, last August we formulated 3 specific commitments we want to meet by 2025. To perform specific things for the future and prosperity of our country. Through the Slovenská sporiteľňa Foundation’s financial education program FinQ, we will teach 200,000 children to think critically, as we believe that financially educated young people are a precondition for Slovakia’s economically successful future. 

We will plant 300,000 trees, as we believe that sufficient greenery in forests and cities contributes to climate sustainability. In cooperation with the Dostupný Domov [Affordable Homes] organization, we will buy about 400 apartments for 1,000 people in material need, as we believe that through housing we can positively and measurably improve the future of socially disadvantaged groups. Already last year, we took the first partial steps towards each of the commitments.

Last year, through our foundation activities we supported 107 projects from several fields (social assistance and health, environment, sports, civil society, culture) with an amount of more than one million euros.

WE ARE BENEFICIAL for clients

Financial health & prosperity

We care for our clients’ financial health. We want them to have a good financial security. Through a financial plan, we assist them in managing their finances correctly, making their dreams come true, and coping with difficult life situations. We advise them in investing, saving, insurance or retirement insurance. By the end of last year, since the launch of the service in May 2020, we had 1.1 million financial plans completed.

Investing is one of the key pillars of good financial security for the future. Moreover, we sell investment products digitally, and with George our clients have investments in stocks and ETFs under control. We also marketed a unique Fund for the Future – the first Slovak fund aimed at megatrends that change society (health care, lifestyle, technology and innovation, the environment and developing countries).

As at the end of last year, 322,000 of our clients had made investments here.

Digital innovations

Digital innovation moves the world. In April 2021, our George celebrated one million fans. During the year it acquired multiple innovations – Payme, Moneyback Rewards, Financial Plan. In a few clicks, it can handle investments or make an extraordinary loan repayment. It can refinance loans and set up a business account. For entrepreneurs and companies, we brought the great innovation Terminal in mobile. The new functions were also added to our electronic corporate banking Business24.

Eco innovations

In June 2021, we tuned in to the environmental wave. We started issuing degradable payment cards that degrade up to 99%. They are made of a material that degrades quickly when added to organic compost. We will gradually replace degradable cards with recycled ones.

Likewise, we started recycling cards. Clients of any bank can bring their expired cards to any of our branches.

A better life thanks to housing

Last year, we facilitated our clients with an easy way to refinance their liabilities, and this digitally via our George.

At the same time, as one of just two banks on the Slovak market, we made it possible to make an extraordinary repayment on a mortgage or consumer loan via electronic banking.

Last year, we provided a total of 32,253 new housing loans in the amount of  EUR 2.85 billion.  

We help business

We are the best financial advisor and the most relevant advisor for both life and business.

Last year, we once again became the bank with the most satisfied corporate clients in Slovakia, and in that most difficult year, we provided the highest number of business loans on the market. Overall, there were 6,350 such loans (including for small businesses), totalling almost EUR 2 billion.

Program for start-ups

We are the only commercial bank in Slovakia with a comprehensive scheme for new entrepreneurs.

Since 2015, more than 7,000 new entrepreneurs have joined the scheme, and have received training and free individual counselling with our specialists. We have already approved hundreds of loans and leases. We have consulted on thousands of ideas for starting own businesses.

Last year, we provided new entrepreneurs 789 loans totalling EUR 15 million. We financed 186 non-profits and social economy entities in the amount of EUR 27 million.

WE ARE SUCCESFULL

Consolidated, audited financial results of Slovenská sporiteľňa as of 31 December 2021 according to International Financial Reporting Standards (IFRS).

FINANCIAL HIGHLIGHTS AS OF 31 DECEMBER 2021 (Y/Y COMPARISON) 

“As expected, 2021 was truly exceptional in terms of financial results. And as we were saying during the year, it is important to look at the results from a long-term perspective. And the perspective says it clearly – to be profitable, we must do significantly more business. Today, our operating profit is slightly lower than in 2011, but our assets have doubled. This shows that modern banking business is quite tough. I am glad that alongside the volume of loans and deposits, we see notable growth in income from investing and from insurance brokerage. Naturally, provisions had a huge effect on the results. A 99% decrease in risk costs is not something experienced every year. This is all good news. In the pandemic year 2020, we behaved responsibly and were well prepared for a possible downturn in the economic situation. And when individuals and firms proved to be financially sound, when most of them returned to normal loan repayment, the provisions could be gradually released,” says Pavel Cetkovský, Chief Financial Officer and Member of the Board of Directors of Slovenská sporiteľňa.

BUSINESS PERFORMANCE OVERVIEW OF SLOVENSKÁ SPORITEĽŇA AS OF 31 DECEMBER 2021

Net interest income went down by 1.3% y/y from EUR 433.6 million to EUR 427.9 million. The extremely low interest rates on the market and the resulting decrease of interest income from loans also translated into a decrease of net interest income. On the other hand, interest income from TLTRO operations had a positive impact on net interest income. The one-off positive effect booked in 2021 was EUR 27.8 million.

Net fee and commission income increased by 18.4% y/y from EUR 147.2 million to EUR 174.3 million. Net income in the area of resources distributed but not managed had a strong positive impact. This mainly applies to higher commissions from mediation of mutual funds (+ EUR 8.7 million) and mediation of insurance (+ EUR 2 million). Income from payments services also saw an increase; this also includes the positive effect of switching to a single card company.

The bank recorded a net profit of EUR 9.8 million in the area of net trading and fair value result (it was EUR 12.2 million in 2020) which is mainly attributable to derivative transactions.

General administrative expenses went up by 1.9% y/y to EUR 292.4 million (in 2020 it was EUR 287.1 million). Personal expenses decreased by 2.0%, while other administrative expenses grew by 12.6% mainly as a result of the increased contribution into the Deposit Protection Fund and higher IT costs. This increase was partially offset by a decrease of write-offs by 8.7%. 

Operating profit went up by EUR 16.6 million, accounting for an increase of 5.4%. Cost income ratio went down to 47.6% compared with last year.

While the bank recorded a net impairment loss on financial assets in the amount of EUR 107.9 million in 2020, in 2021 it recorded a net loss in the amount of EUR 1.1 million. The quick and robust economic recovery and lower default rates than expected were the reason behind lower creation of provisions; we were even able to release provisions in certain cases.

The share of defaulted loans on total loan volume decreased from 2.4% to 1.8% while the coverage with provisions improved from 107.4% to 115.9%.

Total levies of the bank went down from EUR 38.8 million to EUR 14.1 million. The cancelled bank levy had a positive impact but the contribution into the Deposit Protection Fund increased considerably from EUR 1.1 million to EUR 9.4 million. The annual contribution into the Single Resolution Fund went up from EUR 4.0 million to EUR 4.7 million.

Consolidated profit after tax reached EUR 228.1 mil. EUR.

The volume of loans to customers increased by 6.6% y/y and achieved EUR 15.5 billion. Retail loans were the major driving force; they increased by 6.2% y/y (by EUR 0.7 billion) compared with 2020. Slovenská sporiteľňa again confirmed its position as market leader in retail loans; its market share in retail loans reached 24.7% in 2021. The main growth driver were housing loans which grew by 8.9% (EUR 0.8 billion in absolute terms), while consumer loans went down by 9.7% y/y (EUR 0.2 billion in absolute terms).    

Loans to corporate clients (including factoring and leasing products) increased by 6.5% y/y (by EUR 0.3 billion) and reached EUR 4.6 billion.

Retail deposits increased from EUR 13.2 billion to EUR 14.0 billion, providing a solid base for financing and room for further growth of the bank. Deposits from customers rose from EUR 14.9 billion to EUR 16.0 billion compared with the year 2020.