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HNB: Deposit Rates Decline, Loans to Companies Become Cheaper

<p>Hrvatska narodna banka</p>
Hrvatska narodna banka / Image by: foto Ratko Mavar

The Croatian National Bank has announced that the average interest rates of banks in July 2025 were again lower for both deposits and loans, continuing this year’s trend of easing the cost of money.

The most significant shift is observed in the financing of the economy. Short-term loans to companies in July were contracted at an average of 2.89 percent, which is 1.56 percentage points lower than a year ago. Long-term loans fell to 3.48 percent, 1.84 points below the level from July 2024. Compared to April, the cost of money is lower for both short-term (−0.30 b.) and long-term (−0.85 b.), facilitating the financing of working capital and investments.

For company deposits, banks offered 1.80 percent for short terms and 0.76 percent for long terms in July. A larger shift is recorded for short terms (−1.51 b. year-on-year), while long-term deposits recorded a milder decline (−0.36 b.).

On the household savings side, short-term deposits fell to 1.39 percent, and long-term to 0.75 percent. Compared to last summer, this represents a decline of 0.83 and 0.69 percentage points, respectively. Thus, every new short-term deposit today is significantly less compensated than a year ago, while the decline for long-term deposits is somewhat milder. In a quarterly comparison, banks further lowered interest rates for short terms (−0.09 b.p. compared to April), while the average for long terms slightly increased (+0.16 b.p.), indicating an attempt to tie funds for a longer period.

The average interest rate on housing loans to households in July was 2.98 percent, which is 0.07 percentage points higher than in April. On the other hand, overdrafts in July were at 5.21 percent, 0.25 b. lower than in April, and credit card loans at 3.85 percent. The average interest rates for non-purpose and other loans amounted to 5.56 percent.

In summary, declines are most rapidly reflected in standard credit products, while the deposit side and revolving forms of borrowing react more slowly.

The HNB reminds that the published values are weighted monthly averages on new contracts, using the amounts of newly received deposits and newly approved loans as weights (with methodological exceptions for overdrafts and cards). Therefore, declines and increases signal the market direction, but do not mean that all existing users will immediately feel lower costs or higher yields.