Page 37 - Central & Southeast Outlook 2020

over the last few years, though in 2019 the focus was on Estonia and Latvia rather than Lithuania.
This has caused some of the major Scandinavian banking houses, some of which have been at the heart of recent scandals, to review their commitments to the region. Danske Bank announced its exit from the Baltic states in February 2019, and three months later Handelsbanken said its Baltic business was “not worth the cost”. However, Swedbank extended its commitment to Lithuania, buying up Barclays’ financial technology centre, Rise Vilnius, in May 2019.
The Lithuanian authorities were mulling various steps affecting the banking sector as of the end of 2019.
The government appears to have cooled on the previously mooted plan for a banking asset tax, but under the 2020 budget, the corporate tax for banks is being raised from 15% to 20%.
The same committee has also put forward the idea of setting up a state commercial bank, and President Gitanas Nauseda has spoken in favour of the idea.
5.6 ​Finance - Slovakia
According to the National Bank of Slovakia, ​Slovakia's stable and profitable banking sector, positively influenced by net interest income growth in 2019, is likely to be threatened​by low interest rates, growth in indebtedness of Slovak households, and the planned extension and increase in the bank levy in 2020.
Due to the introduction of the bank levy, the central bank warned there is a threat of capital outflow that would affect financing the economy. Also, the Council for Budgetary Responsibility warned that the state debt could thus increase to 48.2% of GDP in 2019 and 2020.
The special bank levy was introduced by Finance Minister Ladislav Kamenicky in 2019, despite the warnings by the European Central Bank, and is due to should increase from 0.2% to 0.4% of the value of banks' liabilities in 2020, then drop back to 0.2% in 2021. Banks are expected to pay an additional €144mn in 2020.
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