Slovakia's new government targets bank profits in first budget

(Reuters) - Slovakia's new government will target a higher share of banks' profits as it draws up a 2024 budget and seeks to cut a soaring deficit, Prime Minister Robert Fico said on Monday.

A previous government had scrapped a special bank tax in 2020 which had been in place under a former leftist government led by Fico before his resignation in 2018.

Fico is backing its re-introduction as his new three-party government coalition took power last month after a Sept. 30 election and must bring down a deficit expected to be the highest in the euro zone.

Fico on Thursday said public finances were in a "cruel" state and that the government was facing a "small miracle" to consolidate, stabilise finances and maintain social standards.

"We are planning for record bank profits and we want overall taxation of banks to be significantly higher in 2024 than what was before," he told a news conference shown on the Finance Ministry's Facebook account.

Slovakia's top banks include KBC Group's CSOB, Erste Group Bank's Slovenska Sporitelna, Raiffeisen's Tatra Banka and Intesa Sanpaolo's VUB.

Slovakia's deficit is forecast to jump to up to 7% of gross domestic product in 2023, strained by increased social benefits and spending to help ease the strain of high energy prices.

Slovakia is facing a gradual consolidation pace after Fico's SMER-SSD party agreed with coalition partners - the centre-left Hlas and nationalist SNS parties - that budget easing will not come at the cost of social standards.

The new budget, which Fico wants ready by the end of November to ensure approval before the year-end, will include measures like an extra pension payment and mortgage loan subsidies.

(Reporting by Jason Hovet in Prague; editing by Jonathan Oatis)