In the first quarter of 2022, total assets of credit institutions increased by HRK 5.3bn (1.1%) from the end of 2021 and stood at HRK 506.2bn.
The increase in total loans and advances of 1.2% and a decrease in non-performing loans (NPLs) of 2.9% resulted in a further fall in the share of NPLs in total loans – from 4.3% at the end of 2021 to 4.2% at the end of the first quarter of 2022. NPLs fell in the portfolio of loans to non-financial corporations where their share in loans dropped from 9.9% to 8.8%. The same trend was recorded in the portfolio of loans to households, in which NPLs fell and so did their share in loans to that sector, from 6.6% to 6.4%.
The operation of credit institutions in the first quarter of 2022 generated HRK 1.6bn in profit, improving profitability indicators. Profitability indicators rose from the end of 2021. The return on assets (ROA) rose slightly from 1.2% to 1.3% and return on equity (ROE) rose from 8.8% to 9.5%.
The key indicators of banking system capitalisation remained high in the first quarter of 2022. The total capital ratio of the banking system fell from 25.9% at the end of 2021 to 25.6%. All credit institutions boasted total capital ratios in excess of the minimum prescribed of 8%. Resolution proceedings were opened against Sberbank d.d. and the bank’s ownership structure was changed from private to state ownership, which increased the number of state-owned credit institutions to three.
Credit institutions' liquidity measured by the liquidity coverage ratio (LCR) remained high. At the end of March 2022, all credit institutions met the prescribed minimum liquidity requirements, and the LCR stood at 190.5%.