In the first quarter of 2024, total assets of credit institutions decreased by 1.5% from the end of 2023 and stood at HRK 77.4bn. Assets decreased in most credit institutions.
Total loans and advances fell by 2.4% from the end of 2023, largely due to a fall in deposits with the central bank. The developments in loans to most important sectors (households and non-financial corporations) were divergent: while loans to households continued to grow those to non-financial corporations practically held steady. Non-performing loans and advances (hereinafter referred to as ‘NPLs’) dropped by 2.7%, primarily those in the portfolio of loans to non-financial corporations.
The share of NPLs in total loans and advances at the end of the first quarter of 2024 has not changed much from the end of 2023 and stood at 2.6%. The share of NPLs in the portfolio of loans to non-financial corporations fell from 5.1% to 4.8% and in the portfolio of household loans, the share of these loans fell from 4.2% to 4.1% of loans to that sector.
The operation of credit institutions in the first quarter of 2024 generated HRK 413.4m in profit. Profitability indicators rose from the end of 2023. The return on assets (ROA) thus rose from 1.8% to 2.1% and return on equity (ROE) rose from 15.5% to 18.1%, driven by an increase in interest income, with a large contribution coming from income from overnight deposits with the CNB.
The key indicators of banking system capitalisation remained high and the total capital ratio of the banking system edged down slightly to 23.3%, influenced by a fall in total capital and heightened risk exposure. All credit institutions had total capital ratios in excess of the minimum prescribed of 8%.
Credit institutions' liquidity measured by the liquidity coverage ratio (LCR) also remained high. At the end of the first quarter of 2024, all credit institutions met the prescribed minimum liquidity requirements, and the average LCR stood at 230.5%.