Slovenská banka, Bratislava

At the end of 1878, Peter and Daniel Makovický, two brothers who had become prominent business figures in Ružomberok by dealing in colonial goods, announced a plan to establish a financial institution with Slovak administration and Slovak capital. Their efforts faced opposition from local authorities and from an existing financial institution – Ružomberská sporiteľňa (Ružomberok Savings Bank), which feared their competition. Nevertheless, the founding general meeting of Ružomberský účastinársky úverkový spolok (Ružomberok Joint Stock Credit Society) was held on 3 June 1879. Daniel Makovický was elected to be the administrator of the new financial institution while also holding the position of treasurer. The shareholders paid in only 50% of the shared capital of 30,000 guldens with the remainder being topped up three years later from a reserve base.

The commercial activity of the institution involved mainly deposit-taking, lending and discounting bills of exchange. Loans were granted mostly to traders, craftsmen and small farmers in the County of Liptov. Úverkový spolok sought to attract clientele with higher deposit rates and lower interest rates on loans. However, the demand for loans soon exceeded the institution’s financial resources and so it applied for a rediscounted loan with several financial institutions, which was granted in 1880 by Zvolenská sporiteľňa. Úverkový spolok gradually gained the confidence of the population. In 1883 it paid dividends for the first time: eight guldens for each share. At the same time, the volume of deposits in savings books reached more than 339,000 guldens.

Because of a crisis in the financial markets, the first years of success were followed by a period of stagnation. In 1885, the company had to ask the Pesti hazai elsö takarékpénztár for a relatively expensive rediscounted loan, which all the members of the board and management guaranteed with their own property. A particularly critical situation occurred in 1888, when several members of the board left the institution and established the competing Ružomberská priemyselná banka, which took 50% of the deposits.

The crisis was overcome at the beginning of the 1890s, when the bank’s business began growing gradually again. The general meeting in 1893 decided to increase the share capital to 50,000 guldens and approved a change of name to Ružomberský úverný spolok (Ružomberok Credit Society), joint stock company. Its first branch was established in Trstená the same year. A striking effect of the recovery of public confidence was an increase in deposits, which exceeded 1 million guldens in 1899, when the share capital was increased to 100,000 guldens. The institution participated in the establishment of other Slovak banks: Tatra banka in Martin, Ľudová banka in Nové Mesto nad Váhom, Myjavská banka and others. It was also involved in activities aimed at boosting Slovak industry. As early as 1884 it had granted a loan of 15,000 guldens to the timber processing plant in Ružomberok. In December 1893 it participated in the founding and financing of the Helios mechanical and electro-technical company in Žilina. In 1900 it provided capital of 10,000 Austro-Hungarian crowns for the establishment of a cement and lime plant in Žilina.

The institution changed its name in 1904 to Úverná banka (Credit Bank), joint stock company in Ružomberok, and Vladimír Makovický became its director. Under his leadership, it increasingly focussed its loans and investment capital on the establishment and construction of larger factories, especially in the cellulose and paper industries. Together with Tatra banka in Martin and Živnostenská banka in Prague it founded cellulose factories in Martin (1902) and Žilina (1905). The growth in the bank’s business forced it to increase its share capital to 500,000 crowns, and it would reach 6 million korunas by 1918.

In 1906, the bank established its largest industrial enterprise: the Hungarian Paper Works in Ružomberok. However, its own resources were insufficient to cover all demands for loans, so it was forced to take a large rediscounted loan financed primarily by Živnostenská banka in Prague through its Vienna branch. Živnostenská banka took advantage of the situation to take control of seats on the board of Úverná banka in 1909. With the support of Živnostenská banka, it financed the establishment of a glassworks to produce chemical glass in Žilina in 1912 and participated in the establishment of a works producing lime sand and cement products at Kraľovany. It used the period of prosperity to build up a network of branches. A branch was established in Bratislava in 1910 and in Žilina in 1912. The Žilina branch had sub-branches in Rajec, Čadca and Púchov. In the wake of the collapse of Rovnianek’s bank in America, Úverná banka participated in the recovery of Tatra banka in Martin and the rescue of Myjavská banka in 1912.

After the outbreak of the First World War in 1914, the lending business fell into complete stagnation. On the other hand, the surplus of money led to the repayment of debts and the depositing of surpluses. With this inflow of money, the bank was able to liquidate its rediscounting liabilities by the end of 1917. Úverná banka tried to invest its free funds into securities and commodity trades. Shortly before the end of the war in 1918, it founded a plant for paper products in Ružomberok as well as an ironworks and an enamel bath factory in Bratislava.
On 26 December 1918, a meeting of the bank’s administration decided to change its name to Slovenská banka to distinguish itself from other lending banks, with the further purpose of emphasizing bank’s operation in the whole territory of Slovakia. Together with the change of name the extraordinary general meeting of the bank held on 19 January 1919 approved the decision to increase its share capital to 10 million Czechoslovak crowns (Kč). By the end of that year, the core capital was raised two more times to reach the amount of 30 million Kč.

At the beginning of the 1920s, Slovenská banka was still on friendly terms with Živnostenská banka in Prague which helped Slovenská banka to increase its share capital and grant loans.  The sums involved were not small: in mid-1920, Slovenská banka owed to Živnostenská banka more than 100 million Kč. It was the only Slovak bank that became a member of the Consortium of banks for government and credit operations and the Union of Czechoslovak banks. Through mergers in 1921 it took over several financial institutions, such as Trenčianska obchodná and priemyselná banka, Piešťanská sporiteľňa and Hospodárska banka of Bratislava. The cause of a great euphoria was particularly the merger with Hospodárska banka, which was concluded at the extraordinary general meeting on 17 December 1921. After the merger, Slovenská banka was the largest financial institution in Slovakia with 42 branches and sub-branches, share capital of 70 million Kč and 47.4 million Kč in reserve funds.

After 1918 it continued to build up its corporate group. It expanded and modernized the timber plant and Slovak paper plant in Ružomberok. The bank participated in the process to encourage Czech and Slovak ownership of industries and founded several companies for timber processing and trading in Čadca, Snina, Gelnica, Ružomberok and Štúrovo. Moreover, it also aspired to success in the chemical industry. With the help of Živnostenská banka, it held shares in Československá továreň na látky výbušné (Czechoslovak Explosives Works) in Pardubice and Bantlinové chemické závody (Bantlin Chemical Works) in Perečín. Its sphere of influence also included chemical plants in Bratislava, such as Olea, Chemia and Tatra drogéria. Its influence also extended to breweries and malt-houses in Bratislava, Nitra, Bytča, Vyhne and to Považský liehovar (distillery) in Leopoldov and cannery in Poprad. It took over the ironworks in Prakovce and enamel works in Bratislava from Hungarian capital. By founding Slovenská poisťovňa (Slovak Insurance Company) in Bratislava, it established itself in the field of insurance. By merger with Hospodárska banka it acquired several businesses, especially the Fischer chocolate factory in Trnava, Parný mlyn (steam mill) in Šenkvice and the Tekla cardboard enterprise in Skalica. By the end of 1922, the group of Slovenská banka extended to about 45 joint stock companies in which it owned shares worth 39.1 million Kč.

However, the post-war economic crisis of years 1921 – 1923 showed that the merger with Hospodárska banka had come at the most inconvenient time. It was discovered that Hospodárska banka had tried to extend its influence as quickly as possible by taking over financial institutions and industrial companies without a thorough audit of their overall situation. Therefore, in the crisis years 1922 – 1923, Slovenská banka had to liquidate much of Hospodárska banka’s business and dispose of many stakes in industrial enterprises, which obviously was not without losses. In this period, it also suffered losses from the commercial bankruptcy of borrowing enterprises, decline in the value of purchased securities, reduced prices of goods which it traded for commission and decline in entrusted funds. As a result, the bank was forced to ask for support from Zvláštny fond pre zmiernenie strát z povojnových pomerov (Special Fund for the Mitigation of Losses from Post-War Conditions) in 1925, while as of 31 December 1924 it reported a total loss amounting to 161.3 million Kč. By the end of 1929, the bailout funds for Slovenská banka reached 71.6 million Kč.

During the existence of the Slovak state in 1939 – 1945, the bank fully exploited the wartime boom with extensive lending activities, as well as extending its influence over industrial companies that had previously had substantial Jewish and Czech investments. It succeeded despite not having the warmest or closest ties with the state apparatus, especially in relation to the decision of the Ministry of Finance not to involve Slovenská banka in the consolidation of Slovak banking. Nevertheless, the bank expanded and strengthened its position during the war years, which was mainly reflected in the fact that by 1942 it again managed to increase its share capital to 70 million Slovak crowns (Ks) and deposits increased to 935.7 million Ks by 1944.

Slovenská banka was nationalized in 1945. In a further round of mergers of financial institutions in January 1948, it took over Ľudová banka in Ružomberok, Sedliacka banka in Bratislava and Myjavská banka. After the Communists seized power in February 1948, the process of concentration of Slovak commercial banks was completed. On 25 March the Czechoslovak government decided to create only one operational bank in Slovakia by merging Slovenská banka and Tatra banka to form Slovenská Tatra banka, national enterprise of Bratislava.

The Registry of Slovenská banka in Bratislava was gradually transferred between 1956 and 1959 in disorderly conditions to the archive of Štátna banka československá at Marianka. A part of the documents from the headquarters of Slovenská banka underwent archival processing in 1963. The archive documents were placed in the archives of Štátna banka československá at 27 Krajná Street in Bratislava. In 2003 they were transferred to the Archives of Národná banka Slovenska at 8 Cukrová Street in Bratislava. Archival processing of the remaining part of the registry record was completed in 2007. The documents of the loan department were preserved almost in their entirety. Among other significant documents that were preserved are annual reports and documents concerning the concentration of banks, as well as documents on the merger of breweries in Slovakia from 1924 to 1931, documents of the Ministry of Finance in Prague relating to the bank's group of enterprises from the years 1936 – 1937 and correspondence between senior bank officials and the management of industrial companies.

The archival resources can be used for research of economic, banking and business history in Slovakia until 1948 or in comparative research of credit conditions and interest rates in Central Europe and political background of economic decisions. Documents are written mainly in Slovak language.