Slovenia plans temporary tax on banks' assets to fund flood relief

The new tax will be in the amount of 0.2% of the balance sheet of banks' total for a period of five years and will be proposed by the government along other measures affecting the banking sector, the finance ministry said in a statement on Tuesday.

The proposal was formulated following consultations with the Slovenian central bank under the guidelines of the European Central Bank (ECB) and collected funds will be provided to the Slovenian Reconstruction Fund, SOS Fund. The government will take into account the voluntary payments to the SOS Fund already made by banks.

Banks in Slovenia increased their profitability in 2022 and in the first half of 2023, backed by rising loan interest rates and low deposit interest rates while at the same time, net impairments continued to be low, the finance ministry noted.

The net profit of commercial banks in Slovenia jumped 145% on the year to 467 million euro ($501 million) in the first half of 2023, while their assets increased 6.7% year-on-year to 51.3 billion euro at the end of June, the central bank said last month.

($ = 0.93145 euro)