Last year, domestic banks recorded a historic profit that exceeded CZK 100 billion for the first time. The net profit of the six largest domestic banks increased by 30.6% year-on-year and they earned a total of CZK 76.25 billion. This success was mainly due to higher interest rates and the overall recovery from the covid-19 pandemic.

In times of high interest rates, banks' interest rate "spreads" are rising, resulting in higher profit margins. At the same time, when interest rates rise, people tend to save more money because they can get higher returns on their savings. As a result, banks then have more deposits to lend out or deposit conveniently. The primary contributors to growth have therefore been interest income and, notwithstanding economic developments so far, lower pressure on provisioning. Banks have so far benefited from the provisions made during the covid period.

In early November, the Chamber of Deputies approved the 2023 tax package, which includes a windfall profits tax on the banking and energy sectors. The tax will apply from this year to 2025 and imposes a 60% surcharge on profits deemed excessive. This surcharge will be calculated as the difference between the tax base and the average of the cost of the tax base over the last four years plus 20%. The revenue from this tax is intended to compensate for the additional costs incurred by the State as a result of the capping of energy prices.