Comments on banking system developments in 2022

Published: 1/3/2023

According to unaudited preliminary data as at the end of 2022, total assets of credit institutions increased by HRK 71.3bn from 2021 (14.2%) and reached HRK 572.2bn. Assets increased in most credit institutions.

The increase in total loans and advances by 14.6% and the decrease in non-performing loans (NPLs) by 20.3% resulted in a further fall in the share of NPLs in total loans – from 4.3% at the end of 2021 to 3.0% at the end of 2022. The share of NPLs dropped in both the portfolio of loans to non-financial corporations (from 9.9% to 6.4%) and in the portfolio of loans to households (from 6.6% to 5.0%).

Credit institutions’ operations in 2022 generated HRK 5.3bn in profit. The return on assets (ROA) stood at 1.0%, decreasing from 1.2% at the end of 2021, while the return on equity (ROE) dropped from 8.8% to 8.2%.

The key indicators of banking system capitalisation remained high in 2022, even though the total capital ratio decreased from 25.9% at the end of 2021 to 24.6%. All credit institutions boasted total capital ratios in excess of the minimum prescribed of 8%.

Credit institutions’ liquidity measured by the liquidity coverage ratio (LCR) remained at a very high level. At the end of 2022, all credit institutions met the prescribed minimum liquidity requirements, and the average LCR stood at 242.4%.

Supervisory indicators