Total deposits increased by nearly 14 billion kuna

The latest data from the Croatian National Bank (HNB) indicates a continuation of the annual growth of total deposits in November 2015, increasing by nearly 14 billion kuna or almost 6 percent, to 258 billion kuna.

Total deposits, which include deposit money as well as term and savings kuna and foreign currency deposits, increased in November compared to October of last year by 841 million kuna or 0.3 percent, while on an annual basis, compared to November 2014, the growth amounted to 5.7 percent, according to analysts at Raiffeisenbank Austria (RBA). Total savings and term deposits reached 208.7 billion kuna at the end of November last year, recording a monthly increase of 221.8 million kuna or 0.1 percent. On an annual basis, compared to November 2014, they were higher by 6.8 billion kuna, and such strong annual growth, of 3.4 percent, RBA states, is a result of the increase in foreign currency deposits, while kuna deposits recorded an annual decline. Total foreign currency deposits amounted to 173.2 billion kuna at the end of November, increasing by 537 million kuna or 0.3 percent compared to October and by as much as 7.2 billion kuna or 4.3 percent compared to November of the previous year. The relatively strong annual growth, RBA analysts note, is partly a result of the transaction related to the sale of Adris’s TDR to the multinational company British American Tobacco (BAT). Savings and term kuna deposits, on the other hand, amounted to 35.5 billion kuna in November last year, increasing by 315 million kuna (0.9 percent) compared to October, while compared to the same month of the previous year, they decreased by 386 million kuna, or 1.1 percent.

RBA analysts emphasize that, since foreign currency deposits account for 83 percent of all savings and term deposits, the strengthening of the kuna against the euro, i.e., the decline in the average exchange rate of the euro against the kuna by 0.6 percent on an annual basis, contributed to mitigating the growth of their kuna expression.  Deposit money at the end of November last year amounted to 49.3 billion kuna, which is 620 million kuna or 1.3 percent more compared to October and 7.1 billion kuna or even 16.9 percent more on an annual basis.

– This indicates a continued preference of the population for holding liquid financial assets in current and transactional accounts, which is partly a result of the decline in bank interest rates on deposits and the introduction of income tax on interest from the beginning of last year, RBA states.

When viewed by sectors, household deposits, which account for nearly 81 percent of total deposits at the end of November last year, amounted to 168.8 billion kuna, recording a monthly increase of 1.2 billion kuna or 0.7 percent. Compared to the same month in 2014, total household deposits increased by 1.5 billion kuna, or 0.9 percent.  With a monthly decline of 42 million kuna, corporate deposits at the end of November amounted to 31.7 billion kuna. Compared to the same month in 2014, total corporate deposits significantly increased by 6.7 billion kuna, growing at a double-digit annual rate of 26.8 percent.

An annual decline in deposits was recorded in the categories of other financial intermediaries (21.3 percent), auxiliary financial institutions (32.6 percent), and insurance companies and pension funds (11.8 percent), and RBA states that positive annual growth rates of deposits are also expected with the data for December, led by the growth of deposits in the household and corporate sectors.