Croatian Banks in the Red for the First Time in 17 Years

Total Croatia News

A bad year for Croatian banks.

For the first time after the banking crisis of 1998, Croatian banks finished a year in the red, which was mostly the consequence of the conversion of loans indexed to the Swiss franc, according to the latest data published by the Croatian National Bank (HNB). In fact, 28 Croatian banks ended the year with a total gross loss in the amount of more than 4.7 billion kuna, which is even more than the losses in 1998, when the total gross loss of banks amounted to 2.7 billion kuna, reports on March 2, 2016.

According to preliminary HNB data, as many as 15 banks ended the year with a loss. The worst results were posted by Hypo Alpe-Adria-Bank which had a loss of 2.25 billion kuna, which is 47.5 percent of the total loss of all the banks last year. The bank pointed out that its operating result for 2015 was “primarily the consequence of the inevitable negative impact of the Swiss franc issue, as well as of the completion of an internal restructuring process, which had a negative one-time effect”.

The second worst results last year were posted by Erste Bank, with a loss of 1.24 billion kuna, followed by Zagrebačka Banka with a loss of 662.3 million kuna. Six out of eight banks which offered loans indexed to the Swiss franc posted losses last year. Due to the implementation of the law on conversion of such loans, the banks had to set aside significant amounts for conversion costs. For example, Zagrebačka Banka allocated 2.64 billion kuna for this purpose, while Privredna Banka Zagreb allocated 1.31 billion kuna.

The remaining two banks which also offered loans in the Swiss franc, PBZ and Societe Generale – Splitska Banka, finished last year in the black, with PBZ making a profit of almost 208 million kuna, and Splitska Banka a profit of 156.8 million kuna. However, these profits are significant lower than the profits reported in 2014, when PBZ made more than 820 million kuna and Splitska Banka nearly 250 million kuna.

Of the 13 banks which finished the year in the black, in addition to PBZ and Splitska Banka, the best results were achieved by Hrvatska Poštanska Banka, whose operating profit for 2015 amounted to 126.3 million kuna.

HNB data show that, by value of total assets, at the end of 2015 the largest Croatian bank by far was Zagrebačka Banka, with assets of nearly 106 billion kuna, accounting for 26.4 percent of total assets of all 28 banks currently operating in Croatia. The second position belonged to Privredna Banka, with assets worth 69.7 billion kuna, while the third largest bank was Erste Bank, with 59 billion kuna in assets.


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