Financial Stability Report – May 2026

The economic environment is less favourable than in the past. The economy is growing more slowly and uncertainty remains elevated. The war in the Middle East has intensified geopolitical risks and disrupted the global energy market in particular. Slovakia may feel its effects mainly through higher energy prices and rising inflation.

The May 2026 Financial Stability Report takes a detailed look at the risks arising from these developments. The main message is that even in a more challenging economic environment, the financial system in Slovakia remains stable.

Strong demand for mortgages and housing continued in 2025

Mortgage demand in 2025 was supported by previous improvements in interest rate conditions and rising property prices. In the case of flats, price growth was in double digits and accelerated slightly further in early 2026. Mortgage growth, however, appears to have already peaked.

Investment demand also contributed significantly to this development, increasing risks in the housing market and making first-time home purchases less affordable. In response, Národná banka Slovenska proposes tightening the loan-to-value (LTV) limit for the financing of third and subsequent properties. At the same time, this creates room for easing the limit for young first-time home buyers.

Households and firms are still able to repay loans, but their sensitivity remains elevated

Some households remain more vulnerable to adverse developments. The combination of relatively high interest rates, slower income growth and increased living costs continues to put pressure on their budgets. This has mainly been reflected in a deterioration in the credit quality of consumer loans. Increased attention should be paid to mortgages granted to self-employed borrowers.

Firms’ financial situation continues to be relatively sound despite weaker economic conditions. Although revenue growth has moderated, profits have declined only slightly. The most notable slowdown in corporate lending has been to large firms and industrial firms. Non-performing loan ratios remain stable.

The banking sector remains strong and resilient

The banking sector in Slovakia has maintained robust profitability, supported mainly by interest income from a growing mortgage portfolio. Profitability has also increased banks’ loss-absorption capacity and their ability to finance the economy. Both capital and liquidity positions remain strong. The financial sector’s resilience has been further confirmed by stress testing.

Also in this edition:

• Risks arising from the war in the Middle East
• The relationship between the increase in new flats and demographics, and the extent to which dwellings are underused
• The risk profile of mortgages for borrowers with business income
• Automotive industry developments from a financial stability perspective