At its session today, the CNB Council discussed the state of the banking system and adopted several other decisions on matters falling within its competence.
In the first three quarters of 2022, banking system assets grew by as much as HRK 50.6bn or by 10.1% from the end of 2021. The predominant funding source of assets growth were received deposits in transaction accounts of households and non-financial corporations, largely reflecting the effects of a successful tourist season and citizens’ preparation for the euro changeover. The bulk of the increase in assets went to loans, notably loans to non-financial corporations in the energy supply sector, while monetary assets also continued their upward trend.
New lending activity and the continuing decrease in non-performing loans (NPLs) resulted in a further improvement in the quality of loans, with the NPL ratio falling from 4.3% to 3.3%. However, the rise in Stage 2 loans indicates an increased risk in the performing part of bank portfolios.
Total capital ratio fell by almost two percentage points, to 24.0%. This was due to a decline in own funds, mostly influenced by unrealised losses based on valuation of bonds at fair value, and also by the rise in total risk exposure. Nevertheless, capitalisation indicators remained high.
Income generated from reversal of impairments for expected credit loss has been the key source of the increase in profits and profitability. The increase in profits was to a lesser extent influenced by the growth in net income stemming from the rise in fees and commissions, while interest income continued its downward trend.
The CNB Council granted approval to the Supervisory Board of Imex banka d.d. to appoint Ozren Dragčević as Chairman of the Management Board and also gave its approval to the Supervisory Board of Karlovačka banka d.d. to appoint Stjepan Oreški as Member of the Bank’s Management Board.