At the end of September 2021, total assets of credit institutions stood at HRK 493.0bn, having increased by HRK 30.5bn or 6.6% from the end of 2020. Assets increased in most credit institutions.
The increase in total loans and advances by 6.4% (gross amount) and the decrease in non-performing loans (NPLs) by 8.1% resulted in a further decline in the share of NPLs in total loans, from 5.4% at the end of 2020 to 4.7% at the end of September 2021. The decline in total NPLs was driven by their decline in non-financial corporations, with the share of this sector’s NPLs in loans falling from 12.5% to 10.7%. NPLs continued to rise in the portfolio of household loans; however, owing to a rise in loans and advances to that sector, the share of NPLs held steady at 7.1%.
Operations of credit institutions generated a profit of HRK 4.0bn at the end of September 2021, an increase of 59.3% over the same period in 2020. Consequently, profitability indicators rose relative to their value at the end of the same period last year. The return on assets (ROA) thus rose from 0.8% to 1.1% and return on equity (ROE) rose from 5.5% to 8.3%.
The effects of last year’s retained profit and targeted regulatory adjustments related to the pandemic continue to be mirrored in the very high values of key indicators of banking system capitalisation. At the end of September 2021, total capital ratio of the banking system stood at 25.6%, with all credit institutions maintaining total capital ratios above the minimum of 8%.
Banking system liquidity measured by the liquidity coverage ratio (LCR) continues to be high (206.9%), with all credit institutions meeting the minimum liquidity requirements.