Banks in Croatia achieved a pre-tax profit of 1.24 billion kuna in the first half of this year, which is almost 65 percent less than in the same period last year, according to the latest data from the Croatian National Bank (HNB), which had previously explained that the negative impact of the crisis in Agrokor would reflect on the profitability of banks.
“In the second quarter, we see that banks continued to recognize risks associated with Agrokor and related companies, which means they are increasing reserves, which will negatively affect their profitability. However, the stability of the banking system is certainly not endangered. Stability is very good, the capital adequacy is 23 percent, and this ensures that it can pass through these problems without issues,” said HNB Governor Boris Vujčić in mid-July.
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Compared to HNB data from the end of the first half of last year, the pre-tax profit of banks decreased by 64.98 percent, or fell by more than 2.3 billion kuna – from last year’s 3.5 billion kuna to 1.24 billion kuna at the end of June this year.
At the same time, the number of banks that operated at a loss increased. Namely, at the end of June last year, out of a total of 28 banks, five banks operated at a loss in the first six months, while at the end of June this year, 14 out of a total of 26 banks did.
The largest loss, amounting to 188.4 million kuna, relates to Splitska banka, which reported a pre-tax profit of 304.5 million kuna for the first six months of last year.
With a loss of 64.8 million kuna, Hrvatska poštanska banka (HPB) finished the first half of the year, which had a gross profit of 88.8 million kuna at the same time last year.
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HPB explained its loss in its semi-annual financial report due to reserves related to exposure to Agrokor. “If reserves had not been formed for exposures to the Agrokor group and related parties, HPB’s pre-tax profit would have amounted to 122 million kuna, while net profit would have been 100 million kuna,” they stated in the report from HPB, adding that their reserves more than doubled, which is a result of allocations for exposure to the Agrokor group and related parties.
In contrast, the highest pre-tax profit in the first half of the year was reported by Privredna banka Zagreb (PBZ) in the amount of 595.5 million kuna. This is 30.8 percent less than PBZ’s profit in the first six months last year.
Following are Erste & Steiermaerkische banka, whose pre-tax profit at the end of June this year amounted to 412.5 million kuna and was 25.8 percent lower than last year, and Raiffeisenbank Austria with a gross profit of 328.4 million kuna, which is a decrease of 25.1 percent.
Although it is usually at the top in terms of profit, Zagrebačka banka found itself in fourth place at the end of the first half of this year with a gross profit of 270.9 million kuna, which is a decline of 71.6 percent compared to the same time last year.
Zagrebačka banka also attributed the decrease in profit in its six-month financial report, published at the end of July, to the rise in costs of value adjustments for placements to companies and reserves for losses, which are nearly three times higher than last year.
In fifth place in terms of gross profit at the end of the first half of this year is Podravska banka with a profit of 10.9 million kuna, which is 68.1 percent less than at the end of June last year.
Preliminary unaudited data from HNB also show that five housing savings banks achieved a total profit of 36.8 million kuna in the first half of this year, which is an increase of 23.5 percent compared to the same period last year.
