According to unaudited preliminary data as at the end of 2021, total assets of credit institutions increased by HRK 38.4bn from 2020 (8.3%) and reached HRK 500.8bn. Assets increased in most credit institutions.
The increase in total loans and advances by 7.6% and the decrease in non-performing loans (NPLs) by 14.1% resulted in an improvement in the value of the relative loan quality indicator, i.e. the share of NPLs in total loans. The share of NPLs totalled 4.3% at the end of 2021, down from 5.4% at the end of 2020. Non-performing loans decreased in both the household sector and the sector of non-financial corporations. The share of NPLs dropped from 7.1% to 6.6% in the portfolio of household loans and from 12.5% to 9.9% in the sector of non-financial corporations (partially under the influence of the sale of non-performing claims).
Credit institutions’ operations in 2021 generated HRK 5.6bn in profit, 108.8% up from the profit generated in 2020. In addition to the increase in profit, banking sector recovery resulted in the increase in profitability indicators so the return on assets (ROA) grew from 0.6% to 1.2%, while the return on equity (ROE) went up from 4.4% to 8.7%.
The effects of retained profit and targeted regulatory adjustments related to the pandemic in 2021 continue to be mirrored in the very high values of key indicators of banking system capitalisation. At the end of 2021, all credit institutions boasted total capital ratios exceeding the minimum 8%, while the total capital ratio of the banking system reached 25.6%.
Credit institutions’ liquidity measured by the liquidity coverage ratio (LCR) remained high, totalling 202.5% at the end of December 2021. All credit institutions met the prescribed minimum liquidity requirements.