Comments on banking system developments in the first half of 2022

Published: 29/8/2022

Two housing savings banks, PBZ stambena štedionica d.d. and Raiffeisen stambena štedionica d.d., merged with their parent banks Privredna banka Zagreb d.d. and Raiffeisenbank Austria d.d., respectively, so that the number of credit institutions fell to twenty-one.

In the first half of 2022, total assets of credit institutions rose from the end of 2021 by HRK 24.2bn (4.8%) and stood at HRK 525.1bn.

The increase in total loans and advances of 4.4% and a decrease in non-performing loans (NPLs) of 8.0% resulted in a further fall in the share of NPLs in total loans – from 4.3% at the end of 2021 to 3.8% at the end of the first half of 2022. The share of NPLs fell in both the portfolio of loans to non-financial corporations (from 9.9% to 7.8%) and in the portfolio of loans to households (from 6.6% to 6.1%).

The operation of credit institutions in the first half of 2022 generated HRK 3.1bn in profit. The return on assets (ROA) remained unchanged from the end of 2021 at 1.2%, while return on equity (ROE) rose from 8.8% to 9.5%.

Although the key indicators of banking system capitalisation remained high in the first half of 2022, the total capital ratio of the banking system edged down from 25.9% at the end of 2021 to 25.0%. 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 high. At the end of June 2022, all credit institutions met the prescribed minimum liquidity requirements, and the average LCR stood at 187.1%.

Supervisory indicators