CNB Council: In 2022, total deposits rose by a record HRK 68.2bn on an annual level

Published: 11/4/2023

At its session today, the CNB Council was informed about the current economic, monetary and financial developments in the euro area and in Croatia, discussed the state of the banking system and enacted several decisions on matters falling within its competence.

In 2022, the banking system assets rose by a record HRK 71.3bn, reaching HRK 572.2bn (EUR 75.9bn). Last year deposits witnessed a record increase, with total deposits rising by HRK 68.2bn (16.3%) and household deposits by HRK 34.0bn (13.2%). Deposits in transaction accounts rose the most, with the intensity of growth in household kuna deposits being attributable to the preparations for the introduction of the euro.

Loans rose the most in the non-financial corporations sector (HRK 19.2bn or 24.0%), with a particularly strong growth being recorded in loans to companies in electricity supply (HRK 8.9bn or 173.8%), trade (HRK 3.7bn or 26.8%) and real estate (HRK 2.1bn or 32.6%) activities. Most of the growth in household loans (HRK 8.2bn or 6.1%) can be accounted for by the increase in housing loans (HRK 7.2bn or 11.0%), followed by a further increase in general purpose cash loans (HRK 1.5bn or 3.1%). 

Loan quality continued to improve, owing to a new credit activity and a further trend of fall in non-performing loans (NPLs), which resulted in a fall in the share of non-performing loans from 4.3% to 3.0%. However, the increase in stage 2 loans, implying a considerable increase in credit risk, without the loan being in default yet, points to a further heightening of the level of risk in the performing part of the portfolio.

The profit and profitability indicators fell, mostly mirroring the growth in operating expenses and, to a lesser extent, rising tax expenditures. In 2022, the banks generated HRK 5.3bn in profit, a decrease of HRK 0.3bn (4.9%) from end-2021 profit. The profit declined despite the increase in the net operating income, mostly driven by the growth in operating expenses.

Banks’ return on assets (ROA) fell from 1.2% to 1.0% and return on capital (ROE) fell from 8.8% to 8.2%.

Banks’ own funds declined, but capitalisation indicators remained very high. Own funds were negatively influenced by the unrealised loss resulting from a fall in the fair value of debt instruments, and as a result of that and increased risk exposure, the total capital ratio fell from 25.9% to 24.6%.

The indicators of short-term and structural liquidity of the banking system were high, with the liquidity coverage ratio (LCR) standing at a high 242.4% and the net stable funding ratio (NSFR) at 179.0%.

The Council also adopted a Decision on the issue and sale of gold and silver numismatic coins "Contour Necktie".