Banks in Croatia Ready to Back up Economy Through Loans

Katarina Anđelković

banks in croatia
Neva Zganec/PIXSELL

November 21, 2023 – According to the director of the Croatian Association of Banks (HUB) Tamara Perko, the banking sector has a good perspective because there are no sectoral overindebtedness and imbalances. Also, the capitalization and liquidity of the sector is extremely high and the loan-to-deposit ratio is low. The banks in Croatia are therefore ready to support the further growth of Croatia with loans.

The presentation on the contribution of banks to growth and development, presented by Perko at the Poslovni Dnevnik conference titled Zagreb – Banking and Financial Center 2023, showed that the direct share of the banking sector in GDP is 3%. 1.1% of the total employed in Croatia work in the same sector, and its contribution through taxes and contributions is 2%. “The Croatian banking sector is the most productive sector in the economy, with the highest added value per employee,” Perko points out.

According to the figures, the share of investments in new and long-term assets is at the level of 4.2% of GDP. Interestingly, the share of banks’ investment in long-term intangible assets, that is, in software, is 14.7%, according to which this sector is the second most significant investor in software in Croatia, right after the ICT sector, emphasized Perko.

The director of the HUB emphasized that the use of new technologies in the use of banking products among citizens is growing. Also, the banking sector contributes 7.3% in profit tax, that is, in 2022, banks paid 173 million in profit tax. According to Perko, about 150 million euros in indirect taxes, such as VAT, excise duties and the like, should be added to this.

The importance of the banking sector, Perko points out, is also indicated by the share of banks in the capital and reserves of the economy of almost 10%.

“According to system stability indicators, such as total capital ratio, financial leverage ratio, liquidity coverage ratio, share of non-performing loans and coverage ratio of such loans, the Croatian banking system is among the three to five most stable, most liquid and capital-strongest banking systems in the EU and European Economic Area. This guarantees the continuation of the banks’ positive contribution to economic growth and development in Croatia,” says Perko.

Banks, by the way, mostly finance the processing industry, trade and energy in Croatia as far as companies are concerned.


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