After ten months of growth, total bank loans decline

Total loans of commercial banks at the end of June amounted to 272.26 billion kuna, which is a slight nominal decline of 0.1 percent on a monthly basis, while compared to last June, there is an increase of 7.1 percent, according to the latest data from the Croatian National Bank (HNB). Statistical data from the central bank shows that total bank loans at the end of June were 57.7 million kuna lower than at the end of May this year, while compared to last June they are higher by 17.9 billion kuna. 

Analysts from Raiffeisen Bank (RBA) note in their analysis of HNB data that total bank loans, which include loans to the central government, local government, enterprises, households, other financial intermediaries, auxiliary financial institutions, insurance companies, pension funds, and investment funds excluding money market funds, have declined on a monthly basis after ten consecutive months of growth. 

When viewed by currency structure, kuna loans at the end of June amounted to 127 billion kuna and continued positive trends on an annual basis, recording an increase of 17.4 billion kuna or 15.9 percent. Foreign currency loans, which amounted to just under 145.3 billion kuna at the end of June, have only slightly increased on an annual basis, by 571.6 million kuna or 0.4 percent.

"The trend of growth in kuna loans has been present for just over seven years, while the share of foreign currency loans in total loans has been continuously decreasing since the second half of 2012 when this indicator was 74.4 percent compared to June’s 53.3 percent," RBA analysts state.

Approximately half of the loans are allocated to households

When viewed by sectors, approximately half of the total loans are allocated to the household sector. The nominal amount of loans to this sector in June was 134.6 billion kuna, achieving a monthly growth of 318.9 million kuna or 0.2 percent. The growth of loans to households continued on an annual basis, but it slowed down to 5.4 billion kuna or 4.2 percent.

In the household sector, RBA analysts note, there is a particularly pronounced tendency for lending in the domestic currency predominantly through cash non-purpose loans, where, although at a slower pace compared to previous months, an annual growth rate of 8.5 percent was recorded. Namely, these loans in May with an annual growth rate of 9.2 percent interrupted the trend of annual growth at double-digit rates that had lasted since the beginning of 2013.

Loans to enterprises or non-financial corporations at the end of June amounted to 86.3 billion kuna, which is a monthly decline of 179.4 million kuna or 0.2 percent. On the other hand, an annual increase of 3.4 billion kuna or four percent was recorded, according to RBA’s analysis. 

Loans to the central government at the end of June amounted to 43.4 billion kuna, which is an increase of 480.2 million kuna or 1.1 percent compared to May, while on an annual basis, a relatively strong increase of 9.6 billion kuna or 28.6 percent was recorded, RBA analysts state.

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