HNB: Banks in Croatia Report Profit of 1.2 Billion Euros in the First Nine Months of 2024

Banks in Croatia reported a profit of 1.2 billion euros in the first nine months of this year, which is an increase of 109.5 million or ten percent compared to the same period last year, according to the latest data from the Croatian National Bank (HNB).

According to provisional unaudited data and tables published by the central bank based on information provided by credit institutions, all 20 banks in Croatia operated with a profit in the first nine months of this year.

The largest profit in the period from January to the end of September 2024 was recorded by Zagrebačka banka, amounting to 380.7 million euros, which is an increase of 35.1 million euros or 10.2 percent compared to the same period last year.

Privredna banka Zagreb (PBZ) reported a profit of 284.3 million euros in the first nine months of this year, which is an annual increase of 14.8 percent or 36.6 million euros.

The third highest profit was achieved by Erste&Steiermärkische banka with 186.7 million euros, which is 5.8 million euros or 3.2 percent more than in the first nine months of last year.

Following is OTP banka with 122.8 million euros, and Raiffeisenbank Austria, with 82.6 million euros, both of which recorded annual profit growth of eight and 2.5 percent, respectively.

In sixth place is the largest bank in majority state ownership, Hrvatska poštanska banka (HPB), with a profit of 61.3 million euros, which is 4.2 million euros less than in the same period last year, representing a percentage decrease of 6.4 percent.

Increased Profitability Indicators

In a commentary on the performance of credit institutions, HNB states that profitability indicators have increased compared to the values at the end of 2023.

Return on assets (ROA) increased from 1.8 to two percent, and return on equity (ROE) from 15.5 to 17.6 percent.

– This is a result of increased interest income, with significant contributions from overnight deposit income at HNB, as well as an increase in interest income from other sectors, especially non-financial companies – emphasized the central bank.

As evident from HNB’s tables, total interest income of banks from January to the end of September 2024 amounted to 2.4 billion euros, which is 456.3 million euros or 24 percent more compared to the first nine months of last year. At the same time, interest expenses increased to 639.8 million euros, which is an increase of 297.2 million euros or 86.8 percent.

Furthermore, HNB notes that key capital adequacy indicators of the banking system are at high levels, with the total capital ratio standing at 23 percent. All credit institutions had a total capital ratio exceeding the prescribed minimum of eight percent.

The liquidity of the banking system, measured by the liquidity coverage ratio (LCR), is also at a high level. At the end of the first three quarters of 2024, all credit institutions met the prescribed minimum liquidity requirements of 100 percent, with the average LCR amounting to 232.6 percent.

Total Assets of Credit Institutions Increased by 4.3 Percent to 81.9 Billion Euros

Total assets of credit institutions increased by 4.3 percent compared to the end of 2023, amounting to 81.9 billion euros, with assets increasing at most credit institutions, according to HNB.

Total loans and advances increased by 2.7 billion euros or 4.2 percent compared to the end of 2023. Meanwhile, the growth of lending to borrowers continued in almost all sectors, especially loans to households, other credit institutions, and central banks, which was partially offset by a reduction in highly liquid assets, namely funds at the central bank and other sight deposits.

Non-performing loans and advances (NPL) decreased by 0.6 percent, primarily in the portfolio of loans to non-financial companies, while they increased in the household portfolio, reported the central bank.

The share of NPLs in total loans and advances at the end of the first three quarters of 2024 decreased compared to the end of 2023 and amounted to 2.5 percent. Meanwhile, the quality of loans in the two most important institutional sectors continued to improve – the share of NPLs in non-financial companies decreased from 5.1 to 4.8 percent, and in households from 4.2 to four percent, according to HNB’s commentary on developments in the banking system for the first three quarters of this year.