Operating Profit of Croatian Post Bank Soared by 280 Percent

The trend of excellent performance in the domestic banking sector has also affected the Croatian Post Bank (HPB). The bank, which is majority state-owned, reported on Friday an operating income of 204.9 million euros for last year, which is 66 percent higher than in 2022. The main driver of the growth in financial results was net interest income, which increased by 106 percent, primarily due to the rise in the ECB reference interest rate, as well as the income that HPB generates on its liquid assets held in accounts with central and commercial banks, and also due to the effect of the merger with Nova hrvatska banka.

Positive trends were also recorded on the fee side, where a growth of 6.5 percent was achieved, while thanks to favorable trends in capital markets, there was also a positive contribution from received dividends, gains from valuation, and trading in financial instruments to the operating result – amounting to 6.6 million euros. Similarly, the movement of the loan portfolio also affected the provisions, which had a nearly neutral effect on the profit and loss account in 2023, compared to a cost of 4.1 million euros on this basis in 2022.

On the other hand, income from fees and commissions recorded a decrease of four percent, dropping to just under 33 million euros. Given that the growth of operating expenses of 106.4 million euros remained single-digit, at nine percent, HPB recorded a strong jump in operating profit of as much as 280 percent, which stopped at 98.5 million euros. Net profit has nearly quintupled to 80.6 million euros, the highest in the corporate history, the bank emphasizes. This level of profitability resulted in a return on equity (ROE) of 18.31 percent, placing HPB second in profitability among large banks in Croatia.

Controlled Costs

– Net other (expenses)/income mainly relates to the profit from the increase in the fair value of the trading portfolio of securities of 3.4 million euros (in 2022, a decrease of 7.7 million euros) and the one-time net other income achieved in 2023 as a result of legal actions taken in favor of the Bank – states the financial report. The bank’s capital and reserves increased by 53.8 percent, and the book value of the share increased by 92 euros, amounting to 264 euros at the end of 2023.

The relative 15 percent increase in employee costs of 51 million euros was primarily conditioned by the impact of the NHB coverage throughout 2023, unlike in 2022 when this cost began to be accounted for from mid-April, and to a lesser extent by adjustments in labor and service prices due to the inflationary environment and other factors, HPB explains. The increase in operating results resulted in an improvement in the CIR indicator, which in 2023 amounts to 51.9 percent, while in 2022 it was 79 percent.

At the Group level, HPB achieved a net profit of 83 million euros.

– The net profit of the parent company amounts to 80.62 million euros, the company HPB Invest recorded a net loss of 367,820 euros, and HPB-Real Estate a net profit of 15,200 euros – states the report.