In the first quarter of 2025, total assets of credit institutions decreased by 0.6% from the end of 2024 and stood at EUR 83.7bn. Assets decreased in most credit institutions.
Total loans and advances (gross amount) decreased by 4.0%, primarily under the influence of highly liquid assets (assets with the central bank and other demand deposits). Lending to two most important institutional sectors continued, with loans to non-financial corporations increasing by 5.0% and loans to households increasing by 2.8%.
The total amount of non-performing loans and advances (hereinafter referred to as ‘NPLs’) remained at the level from the end of 2024 and their share in total loans and advances increased from 2.4% at the end of 2024 to 2.5% at the end of the first quarter 2025. The increase in this share is a consequence of the mentioned decrease in total loans and advances. The share of NPLs in the portfolio of loans to non-financial corporations and households continued to decrease, totalling 4.3 and 3.6%.
The operations of credit institutions in the first quarter of 2025 generated EUR 375m in profits, 9.4% down from the profits generated in the first quarter of 2024. As a consequence profitability indicators decreased: return on assets (ROA) to 1.8% and return on equity (ROE) to 15.4%.
Banking system liquidity measured by the liquidity coverage ratio (LCR) was high. At the end of the first quarter of 2025, all credit institutions met the prescribed minimum liquidity requirement of 100%, with the average LCR standing at 222.2%.[1]
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Due to amendments to prudential regulation, the deadline for submission of reports by credit institutions on own funds and capital requirements, and on the leverage ratio with the balance as at 31 March 2025 was postponed. Therefore, at the time of publication of this comment the Croatian National Bank has no data available on banking system capitalisation indicators for the reporting date of 31 March 2025. ↑