Despite the interest rates on loans still remaining elevated even after the rate cuts by the ECB, loans in Croatia have continued their robust growth. According to the latest data released by the Croatian National Bank, HNB, total Croatian loans issued by financial institutions breached EUR 50bn mark for the first time in history in November 2025, amounting to EUR 50.3bn. This marks an increase of 0.9% MoM, and almost 10% YoY, showing that despite the still elevated inflation, Croatians are borrowing more than ever before. In this quick overview, we look at this trend and what drove it in the last couple of years.
Croatian loan growth has always been elevated, especially compared to the European peers, as housing remains the primary investment vehicle for Croatian, and housing ownership is a top priority for many Croatians.
Despite the volatility we have seen in the last couple of years, with a combination of high inflation & high interest rates, the demand for loans has only been slightly subdued. With the rate cuts initiated by the ECB in summer 2024, loan interest rates have come down, especially ones related to housing loans, the largest individual category. In the latest statistical release by the Croatian National Bank, in November 2025, the Croatian banking sector recorded another milestone: total loan volume breached the EUR 50bn mark for the first time in its history, amounting to a total of EUR 50.3bn. This marks an increase of 0.9% MoM, and 9.7% YoY.
Corporate and household loans growth rates (January 2015 – November 2025, % growth YoY)
Source: Croatian National Bank, InterCapital Research
Looking at the breakdown by categories, housing loans, the largest individual category in the total amount, accounting for 45.6% of all loans issued, amounted to EUR 27.2bn, increasing by 0.7% MoM, and 12.5% YoY. The household loans have remained resilient throughout the period of the rate increases to rate cuts (2023 to 2026 YTD), growing by high single to low double digit levels, despite the change in the interest rate environment.
On the other hand, corporate loan growth rate only picked up in 2025, when the interest rate environment was more favourable, and at the moment, it is growing at a similar (relative) growth rate compared to household loans. In fact, corporate loans grew by 1.3% MoM and 14.1% YoY in November 2025, increasing to almost EUR 17.4bn.
To understand these 2 categories better, it is prudent to look at what segments within them drove the growth. For household loans, housing loans still remain the largest category, growing by 1% MoM, and 15% YoY to EUR 13.5bn in November 2025. At the same time, consumer loans also experienced a noteworthy uptick in 2024 and in 2025, amounting to EUR 10.1bn in November 2025, an increase of 0.2% MoM, and 11% YoY.
Composition of Croatian loans to households (October 2011 – November 2025, EURm)
Source: Croatian National Bank, InterCapital Research
Moving on to corporate loans, all larger categories recorded MoM increases of around 1% or more, while on a YoY basis, all categories recorded double digit growth between 12% and 15%. Looking at this more closely, loans for micro companies amounted to EUR 2.61bn in November 2025, growing by 1.6% MoM and 9.7% YoY. Loans for small-sized companies amounted to EUR 3.75bn, increasing by 1% MoM and 14.4% YoY, while loans for medium-sized companies amounted to EUR 3.86bn, increasing by 0.4% MoM and 24.3% YoY. Lastly, loans for large-sized companies amounted to almost EUR 7bn, increasing by 1.8% MoM, and 9.3% YoY.
Besides these categories, types of loans issued to corporations are also worthwhile to look at. Investment loans remains the largest category, amounting to EUR 7.1bn, and increasing by 0.9% MoM, and 12.9% YoY. Following them, we have working capital loans, which amounted to almost EUR 5.7bn, growing by 1.6% MoM, and 12.8% YoY. Lastly, other loans’ category amounted to EUR 4.5bn, increasing by 1.4% MoM, and 14.5% YoY.
Average new housing and corporate loan interest rates (December 2011 – November 2025, %)
Source: Croatian National Bank, InterCapital Research
To better understand why, an overview of the other side of the lending coin is worthwhile, i.e. interest rates on these loans. Firstly, housing loan interest rates have remained largely resilient to the interest rate environment, increasing from an average of 2.6% in 2022, to a recent all-time-high of 3.8% during the beginning of 2024. However, with the rate cuts, the housing loans interest also dropped, decreasing to an average of 3% as of November 2025, a decreasing of 0.7 p.p. YoY.
The other large category of household loans, i.e. consumer loans, also recorded an improvement in interest rates, although the rates still remain elevated. In November 2025, they amounted to 5.34%, a decline of 0.48 p.p. YoY. On the other hand, corporate loan interest rates did improve the most in relative terms; in November 2025, they amounted to 3.3%, a decline of 1.16 p.p. YoY.
What can be taken away from this data? Loan interest rate environment has improved compared to the high levels recorded when the key interest rate by ECB was set at 4.5% (currently: 2%). The banks were cautious to not increase housing loan interest rates much, which allowed for fast, high single digit to low double digit growth to continue through the period, despite the volatility in the rates.
The demand for real estate remains high; prices of real estate grew by 13.2% YoY, and 4.4% QoQ in Q2 2025, with both existing (+13.7% YoY, +5.2% QoQ) and newly built dwellings (+11% YoY, +1.5% QoQ) growing strongly. By geography, Zagreb, the Adriatic Coast and Other areas all recorded double-digit growth rates YoY, at 12.2%, 12.3%, and 18.2%, respectively. This growth is expected to continue in the future, as not only the demand remains high, but the supply remains limited.
The growth in consumer loans was also significant, with real wages growing in a tight labour market, while rates improved. The overall economy is growing strongly also, but a by product of this increase is of course higher inflation rates than the EU average. The Croatian National Bank did try to temper this growth in mid 2025, introducing new requirements and criteria for loan approval. Despite this, the increases continued, as these requirements were mostly tied to % of income, and as incomes continued to grow, so did this goal post move higher and higher.
Lastly, and something that is most supportive of continued economic growth, is the lower borrowing costs for corporates, which have invested in both working capital loans for continued operations, but especially, new investment loans, which should lead to higher production, better efficiency (through innovation and better technology solutions), more jobs (although the labour market remains tight), and improvement in the overall operational mix. Indirectly, the large investments also support the growth in the construction sector, as demand for new facilities, production lines, factories, etc. also support this sector.
Overall, the growth in GDP and wages remains above EU averages, supported by strong lending activity. If this continues (without an acceleration in inflation, which while the economy is “hot” could occur), Croatia could, in general, climb up to the EU average even faster than previously expected.