Credit Institutions in Croatia Increased Profit by 13 Percent Last Year

Credit institutions in Croatia (19 banks and one housing savings bank) operated in 2024 with a total profit of 1.5 billion euros, reported the Croatian National Bank (HNB) on Monday, which is 177 million euros or 13 percent more than in 2023. Profitability indicators improved compared to the end of 2023, with the return on assets (ROA) increasing from 1.8 to 1.9 percent, and the return on equity (ROE) rising from 15.5 to 16.4 percent. This is the result of increased operating income (net) from all sectors, according to HNB.

All banks operated positively, with Zagrebačka banka recording the highest profit last year at 449.6 million euros, followed by Privredna banka Zagreb at nearly 437 million euros and Erste banka at 225.4 million euros. Credit institutions employed a total of 17,965 employees at the end of 2024. The total assets of banks in Croatia increased by 7.1 percent compared to the end of 2023, reaching a value of 84.2 billion euros, with most of the total 20 banks recording asset growth. Zagrebačka banka has the largest assets at 21.17 billion euros, followed by Privredna banka Zagreb at 16.99 billion euros and Erste banka at 15.11 billion euros.

Total loans and advances from banks increased by 4 billion euros or 6.1 percent compared to the end of 2023. According to HNB, the growth of lending continued in almost all sectors, especially households and financial institutions. This has partially resulted in a reduction of highly liquid assets, i.e., funds at the central bank and other sight deposits, as well as loans to the general government. Non-performing loans and advances (NPL) decreased by 4.2 percent, mostly in the portfolio of loans to non-financial companies and slightly less in the household portfolio. The share of NPLs in total loans and advances at the end of 2024 was 2.4 percent. 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 4.5 percent, and in households from 4.2 to 3.7 percent, HNB emphasized.

Key indicators of the capitalization of the banking system are at high levels, with the total capital ratio at 23.8 percent. All credit institutions had a total capital ratio above the prescribed minimum of 8 percent. The liquidity of the banking system, measured by the liquidity coverage ratio (LCR), is at a high level. At the end of 2024, all credit institutions met the prescribed minimum liquidity requirements of 100 percent, and the average LCR was 230.9 percent, reported HNB.