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NBS takes preliminary decision to cut the CCyB rate to 1.00% from 1 August 2020

The speed and strength of the Slovak economy’s recovery depends on banks capacity to lend to households and firms in these complicated times, and therefore Národná banka Slovenska (NBS) continues to take measures that support lending activity. In that context, the NBS Bank Board today preliminarily decided to reduce the countercyclical capital buffer (CCyB) rate to 1.00% with effect from 1 August 2020.

The main reason for reducing the CCyB rate is to increase the amount of capital available to the banking sector for lending activity, as well as to give banks sufficient capacity for further loan-loss provisioning that reflects their conservative approach to potential future losses. At present, the actual amount of non-performing loans has increased only slightly.

The reduced CCyB rate will provide a sufficient buffer against any potential losses in the period ahead. At the same time, banks’ lending activity is not currently constrained by any regulatory or capital requirements.

Going forward, NBS will be closely monitoring the state of credit losses, the sufficiency of available capital for lending to the real economy, and banks’ dividend policies, since these factors will determine whether or not any further reduction of the CCyB rate will be necessary. NBS stands ready to reduce the CCyB again if the situation requires it.

National Bank of Slovakia
Communications Section
Imricha Karvasa 1, 813 25 Bratislava, Slovak Republic
Tel.: +421-2-5787 2142, +421-2-5865 2142, +421-2-5787 2169, +421-2-5865 2169

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