Change in the publication of loan quality data – new table SP8 Loan quality

Published: 2/12/2019

The Croatian National Bank has begun to publish selected data on loan quality in a new table SP8 Loan quality, which will be released on a quarterly basis within the tables of indicators of credit institution operations.

Specifically, as of 30 June 2019, the breakdown of loan quality under the national methodology is no longer monitored for supervisory purposes; what is used instead is the European Banking Authority (EBA) methodology, which is common for the entire European Union. The changed methodology is based on data from the system of financial reporting by credit institutions (Financial Reporting Framework, FINREP).

Table SP8 Loan quality contains the series of data on the quality of credit exposure as of 30 June 2016, when credit institutions in the Republic of Croatia became obliged to submit unconsolidated reports under FINREP.

The new table will replace tables SP3 Loan quality by sectors and SP4 Loan quality by currencies, containing quarterly data series as of 2008 and 2010, respectively. Data shown in the tables were based on the methodology for monitoring loan quality based on the classification of exposures into risk categories. Due to substantive and terminological changes, there is limited comparability between data in the new table and previously published data.

As regards table SP8 Loan quality, strong efforts were made to maintain the scope of data published in table SP3 Loan quality by sectors, with FINREP reports being used as the source of data. Exceptionally, due to less detailed breakdowns of household loans under FINREP, when compared with the reporting records submitted by banks under the Decision on statistical and supervisory reporting, reporting records have remained the source of data on the quality of selected household loans, while the data compilation rules have been aligned as much as possible with the FINREP rules.

Table SP4 Loan quality by currencies will no longer be updated as the breakdown of exposures by currencies is not provided in FINREP.

All the terms used in table SP8 have been aligned with those in FINREP reports. The key substantive changes are the widened scope of loans to include deposits and advances, the inclusion of data on non-residents in the relevant sectors, and the reporting of amounts with accrued interest.

Data in the table are broken down into the following four categories:

  1. Loans
  2. Non-performing loans
  3. Accumulated impairment of non-performing loans
  4. Ratio of non-performing loans to total loans

Each data category is broken down into sectors, selected activities within the non-financial corporations sector and selected types of household loans:

  1. Central banks
  2. General governments
  3. Credit institutions
  4. Other financial corporations
  5. Non-financial corporations
    • Of which: Agriculture, forestry and fishing
    • Of which: Manufacturing
    • Of which: Construction
    • Of which: Wholesale and retail trade
    • Of which: Accommodation and food service activities
    • Of which: Real estate activities
    • Of which: Professional, scientific and technical activities
  6. Households
    • Of which: Housing loans
    • Of which: Generalpurpose cash loans
    • Of which: Overdrafts

Explanations of specific changes in table SP8 relative to table SP3 are provided below.

SP3 Loan quality by sectors data up to 30 June 2019 SP8 Loan quality data as of 30 June 2016
CATEGORIES
Loans Loans
Refers to all types of loans (instruments from A0207 to A0210, from A0212 to A0230, A0232, A0233, A0305, A0306). Refers to loans and advances, i.e. debt instruments held by the institutions that are not securities (Annex V, paragraph 32). The coverage has been broadened to include deposits and advances that are not loans (suspense items and transit items).
Refers to the gross amount, excluding interest. Refers to the gross amount, including interest.
Source: reporting records. Source: FINREP.
Impairment of B and C risk category loans Accumulated impairment of non-performing loans
Refers to the impairment of loans classified into risk categories B and C in accordance with the Decision on the classification of exposures into risk categories and the method of determining credit losses. Refers to the cumulative amount of impairment losses of debt instruments at amortised cost, while for debt instruments at fair value through other comprehensive income, it refers to the sum of expected credit losses and their changes recognised as impairment of fair value after initial recognition (Annex V, paragraphs 70(a) and 70(b)). As FINREP reports do not provide data on accumulated impairment of non-performing loans and advances to activities within the non-financial corporations sector, this data is not contained in the table.
Source: reporting records. Source: FINREP.
B and C risk category loans Non-performing loans
Refers to the amounts of loans classified into risk categories B and C in accordance with the Decision on the classification of exposures into risk categories and the method of determining credit losses. Refers to non-performing loans and advances meeting either of the following criteria: (a) material exposures which are more than 90 days past-due; (b) the debtor is assessed as unlikely to pay its credit obligations in full without realisation of collateral, regardless of the existence of any past-due amount or of the number of days past due. (Annex V, paragraph 213).
Source: reporting records. Source: FINREP.
Due but unpaid loan receivables  
Source: reporting records. Data are no longer presented.
B and C risk category loans as % of total loans Ratio of non-performing loans to total loans
Refers to the share of loans classified into risk categories B and C, in accordance with the Decision on the classification of exposures into risk categories and the method of determining credit losses, in total loans. Corresponds to the definition of the ratio of non-performing loans to total loans under the European Banking Authority (EBA) methodology.
Source: calculations. Source: FINREP and calculations.
BREAKDOWNS – Sectors
The table shows data for three selected sectors (domestic counterparties) and aggregate data for other sectors:
  1. General government
  2. Non-financial corporations
  3. Households
  4. Other sectors
Non-residents are included in entirety in Other sectors.
The table shows data for all counterparty sectors (Annex V, paragraph 42):
  1. Central banks
  2. General governments
  3. Credit institutions
  4. Other financial corporations
  5. Non-financial corporations
  6. Households
Foreign counterparties are included in each relevant sector.
Source: reporting records. Source: FINREP.
BREAKDOWNS – Activities within the non-financial corporations sector
The table shows data for ten activities and aggregate data for other activities.
  1. Agriculture, forestry and fishing
  2. Mining and quarrying
  3. Manufacturing
  4. Construction
  5. Wholesale and retail trade; repair of motor vehicles and motorcycles
  6. Transportation and storage
  7. Accommodation and food service activities
  8. Information and communication
  9. Real estate activities
  10. Professional, scientific and technical activities
  11. Other activities
The table shows data for activities whose average share in total loans and advances to non-financial corporations exceeded five percent in the period from 30 June 2016 to 30 June 2019 (seven activities):
  1. Of which: Agriculture, forestry and fishing
  2. Of which: Manufacturing
  3. Of which: Construction
  4. Of which: Wholesale and retail trade
  5. Of which: Accommodation and food service activities
  6. Of which: Real estate activities
  7. Of which: Professional, scientific and technical activities
Aggregate data for other activities are not presented.
Source: reporting records. Source: FINREP.
BREAKDOWNS – Types of household loans
The table shows data for seven types of household loans and aggregate data for other loans:
  1. Housing loans
  2. Mortgage loans
  3. Car loans
  4. Credit card loans
  5. Overdrafts
  6. General-purpose cash loans
  7. Investment loans
  8. Other household loans
The table shows data for loans whose average share in total loans and advances to households exceeded five percent in the period from 30 June 2016 to 30 June 2019 (three types of loans):
  1. Of which: Housing loans
  2. Of which: General-purpose cash loans
  3. Of which: Overdrafts
Aggregate data for other types of loans are not presented.
Source: reporting records. Source: reporting records.