Erste & Steiermärkische bank d.d. Zagreb merges with Riječka banka d.d. Rijeka

Published: 11/6/2003

The CNB Council chaired by Governor Željko Rohatinski, PhD, examined on Wednesday economic and monetary developments in the previous months of this year. Inflation has remained very low, at the annual rate of only 0.9%. Exchange rate has been stable, without the central bank interventions in the foreign exchange market. The available data point that banks' credit activity has remained intense, but the upward trend slowed down relative to the previous period. Data for end-June will allow a more complete insight into the effect of the measures taken by the Croatian National Bank in that respect.

Current account deficit for the first quarter stood at USD 1,006m, relative to USD 875m last year. Statistical data for the first quarter of this year indicate a strong growth in exports of goods and services (goods exports amounted to USD 1.4bn, an annual growth of 39.7% in nominal terms), but also a large increase in imports of goods (USD 2.9bn, 37.2% annual growth) in comparison with the same period last year. However, for the purpose of a more realistic analysis of these figures, it should be noted that this growth was also accompanied by US dollar depreciation of 22% and 20% against the euro and the kuna, respectively. For the same reason, USD 600m of a USD 2.1bn increase in external debt in the first four months of this year can be accounted for by cross-currency changes. Consequently, a real increase in borrowing was USD 1.5bn. However, since a further growth in international reserves was recorded in the same period, Croatia has remained the country with a strong international liquidity.

The CNB Council approved the request by Riječka banka d.d. Rijeka for a merger of Erste & Steiermärkische bank d.d. Zagreb with Riječka banka d.d. Rijeka. A merger of the two banks that are already related by ownership structure, will create a bank with a head office in Rijeka, operating under the name Erste & Steiermärkische bank, which will be the third largest bank by the size of its assets in the Croatian banking system. The CNB Council also gave its approval to the proposal of the supervisory board of Riječka banka d.d. Rijeka to appoint Tomislav Vuić and Borislav Centner as members of the management board of that bank.