HUB: The Financial Assets of Croats Are Growing Rapidly

Croats are thrifty, and their financial assets are growing rapidly, even though interest rates are at historically low levels, according to an analysis by the Croatian Banking Association (HUB) on the occasion of World Savings Day on October 31.

Croats are no longer “hungry for credit.” Their amounts are decreasing, which is why the net financial assets of Croatian citizens are growing faster than total financial assets, the HUB analysis states.

Total financial assets of citizens increased from 351 to 409 billion kuna, or by 58 billion kuna, nearly 20 percent, from the end of 2012 to mid-2016. Thus, total financial assets per capita in Croatia amount to about 13,000 euros.

At the same time, financial liabilities have decreased by about 12 billion kuna, so net financial assets have grown from 212 billion at the end of 2012 to 281 billion kuna in the middle of this year. This represents an increase of about 69 billion kuna or 33 percent in three and a half years, the analysis states.

Although other forms of investment are also growing, deposits of Croatian citizens in credit institutions dominate financial assets, and every third term deposit is tied to periods longer than two years.

The share of short-term savings has decreased from 61 to 41 percent, and it can be expected that this process will continue in the near future. A strong preference for foreign currency savings has continued, but this share in total savings has decreased to 73 percent this year, approximately the same as before the 2008 crisis, according to HUB.

The distribution of financial wealth has remained similar – with more than 50 percent consisting of cash and deposits in credit institutions. However, the importance of the second most significant asset form – insurance and pensions – is increasing, with pension accounts in second pillar funds being the most important.

“In the changes in the structure of financial assets, one novelty can be seen – in the past three and a half years, the value of assets invested in insurance and pension assets has grown faster than cash and deposits. This change is partly caused by the increase in value on pension accounts, which are mainly invested in government bonds. Direct investments by citizens in equity and shares of investment funds are also increasing,” HUB states.