Everyone in Croatia – from the Government, the Croatian National Bank to analysts – agrees that the Croatian banking system, especially after raising the ‘threshold’ of insured savings to 400,000 kuna, is safe and quite immune to the crisis shocks from the surrounding area.
However, the alarm bell is ‘in preparation’ after nine European banks operating in Central and Eastern Europe, which are mostly owners of Croatian banks (Raiffeisen, Erste, Unicredit, Intesa Sanpaolo, Societe Generale), requested assistance from the European Central Bank. Bankers have asked Governor Trichet that liquidity and lending activity funds not be limited only to new EU members but also offered to non-member countries. If the owners of our banks, precisely due to the spillover of the crisis to the countries where they have so far collected the highest profits (Croatia is among them), have requested assistance, does this mean that Croatian banks, although they are separate companies, are not doing well?
Financial analyst Žarko Primorac says it is no secret that Austrian banks are the most exposed to the crisis – not because they have invested the most in mortgage derivatives, but because they are among the smaller banks in Europe, so ‘crisis’ investments have encompassed more capital. Requesting assistance is an expected move, he says, as many countries not only in Central and Eastern Europe but also in the Baltics are affected by the crisis, and a significant GDP decline is expected there (indirectly also the possibility that foreign owners achieve equal profits). However, Primorac does not expect major problems in Croatia. If the owner of one of our banks gets stuck in a crisis, it could happen that it changes ownership. The only dangerous situation would be if the owner starts withdrawing capital, warns Primorac. If that is in their plans, the legal limit is up to 10 percent of the guaranteed capital, and the Croatian National Bank is already preparing an ‘appropriate response’.
