The Council of the Croatian National Bank examined at its today's session recent economic and monetary developments, condition of the banking system in the fourth quarter of last year and a report on international reserves management in 2006.
There were thirty three banks and five housing savings banks operating in the Croatian banking system in the last quarter of 2006. Of that number, sixteen banks were private, domestically-owned banks and two banks and one housing savings bank were state-owned. Foreign-owned were fifteen banks and four housing savings banks which accounted for 91 percent of the total banking system assets. According to unaudited provisional data, bank placements rose by HRK 25.3bn in the observed quarter, while banks' debt with their majority foreign owners rose by HRK 11.7bn and their share capital by HRK 2.3bn. At the end of last year, total banking system assets stood at HRK 311.1bn, an increase of 16.78 percent compared with the end of the previous year, with the banks accounting for HRK 304.8bn and the housing savings banks for HRK 6.4bn of the total. Capital adequacy ratio was 13.23 percent. As shown by unaudited data provided by banks, last year's profitability as measured by rate of return on assets was 1.50 percent and that measured by rate of return on equity 12.61 percent.
Reported banks' profit before tax at the end of 2006 was HRK 4.2bn while housing savings banks reported a loss of HRK 60 m.
International reserves managed by the central bank reached EUR 8.7bn at the end of last year, which is an increase of EUR 1.3bn compared with the end of 2005. This increase was achieved mainly through interventions in the foreign exchange market with the CNB purchasing foreign currency on 12 occasions last year to reduce appreciation pressures and prevent excessive strengthening of the kuna. The central bank sold foreign currency on only one occasion last year.