At the end of October 2022, the total deposits of Croatian financial institutions equaled HRK 407.5bn, which is an increase of 12.7% YoY, but a slight decrease of 0.1% MoM.
The Croatian National Bank (HNB) has published its latest report on the consolidated financial positions of the monetary financial institutions, for the month of October 2022. In it, we can see that the total deposits in Croatia amounted to HRK 407.5bn at the end of October, implying an increase of 12.7% YoY, but also a decrease of 0.1% MoM. To put things into perspective, this would mean that on a YoY basis, the total deposits increased by HRK 45.8bn. With the summer season over, and as such the reduction of the growth of deposits stemming from rental income (from private individuals), a slowdown in the deposit growth is expected. However, the growth is still significant and considering that at this point, we have less than a month until the switch to the euro, the growth in deposit rates should accelerate in December.
Breaking the deposits by components, on a YoY basis, demand deposits increased by 15.2% YoY, and amounted to HRK 171.9bn. On the other hand, saving deposits increased by 10.9% YoY and amounted to HRK 235.6bn. On a monthly basis, the increase in demand deposits amounted to 0.9%, while saving deposits decreased by 0.9%, implying that the main driver in the monthly slowdown of overall deposits is the saving deposits.
Croatian deposits breakdown (November 2012 – October 2022, HRKbn)
Source: HNB, InterCapital Research
Meanwhile, household deposits increased by 10.5% YoY and amounted to HRK 267.7bn. On the monthly basis, this increase amounted to 0.5%. Overall, this would imply that 65.7% of all deposits are household deposits, representing a decrease of 1.26 p.p. YoY, but an increase of 0.39 p.p. MoM. The trend we can see in the deposit holdings in Croatia is the usual one that we have seen for a long time now, with the majority of financial assets held in deposits. The current inflation rates are degrading the value of these deposits, but the expected switch to the euro and the appliance of the ECB’s interest rate hikes, which primarily influence the loan interest rates, will also have a positive impact on the deposit rates.