At its session today, the Croatian National Bank Council discussed current economic and financial developments and adopted several decisions on matters falling within its competence.

Total credit institution assets increased by HRK 30.5bn (6.6%) at the end of the third quarter of 2021 from the end of 2020, standing at HRK 493bn. Loans and advances registered the highest growth. Cash balances also continued to rise at a high rate.

As a result of this and a continuing drop in the non-performing loans of non-financial corporations, the quality of total exposure continued to improve and the share of NPLs in total loans decreased from 5.4% to 4.7%. NPLs in the household loan portfolio increased, but new credit activity offset this increase, with the result that the share of NPLs in the household sector remained at 7.1%. The share of loans in stage 2, which are not yet in default, but are estimated to witness a significant increase in credit risk, has remained high.

In the first nine months of 2021, credit institutions reported current profit of HRK 4.0bn, which is HRK 1.5bn (59.3%) more than in the same period in the previous year. The increase in profit resulted from considerably lower impairment allowances for credit losses and, to a lesser extent, from an increase in net operating income. Profitability indicators thus grew from the comparable period: the return on assets (ROA) increased from 0.8% to 1.1% and the return on equity (ROE) went up from 5.5% to 8.3%. All credit institutions reported profit.

The growth of highly liquid assets boosted liquidity in the system, with the LCR standing at 206.9%. Due to the absence of risky investments and the maintained total capital level, capital adequacy indicators have remained very high – the total capital ratio of the banking system stood at 25.6%.

The CNB Council granted approval to the Supervisory Board of PBZ stambena štedionica d.d. for the appointment of Branimir Ćosić as Chairman of the Management Board of PBZ stambena štedionica d.d. and for the appointment of Dražen Klarić as Member of the Management Board of PBZ stambena štedionica d.d. The Council also granted approval to the Supervisory Board of Agram banka for the appointment of Boris Zadro as Chairman of the Management Board of Agram Banka d.d. and for the appointment of Nataša Jakić Felić as Member of the Management Board of the bank.

The CNB Council issued the Decision to initiate the compulsory winding-up against Internet Mobile Bank d.d. undergoing winding-up proceedings and the Decision on release into circulation of kuna and lipa coins with the mint year 2022.