By the end of July 2022, the total deposits of Croatian financial institutions amounted to HRK 397.2bn, representing an increase of 3.5% MoM, and 13.3% YoY.
The Croatian National Bank (HNB) has published the latest monthly report on the consolidated financial positions of the monetary financial institutions, for July 2022. According to the report, at the end of July 2022, the total deposits in Croatia amounted to HRK 397.2bn, which is a growth of 3.5% MoM, and 13.3% YoY. The positive trend in deposits has continued strongly for the 2nd month in a row, with June 2022 marking a 3.3% growth MoM. This is a deviation from the standard trend, as over the last couple of years, for the majority of the time, the MoM growth has been steady, but low, usually under 1%. There are two main reasons for this increase. First of all, as the tourist season was (and still is) in full swing during June and July, there are a lot of inflows of cash in the hospitality industry. Considering app. 50% of all tourism-related real estate that is rented is in the hands of private individuals, the trend in the growth of deposits in this period is expected. The 2nd reason that has to be taken into account is the fact that the switch to the euro will happen in January 2023, so a lot of money that was physically held before by people is being put into banks, so it can safely be converted into euros. Furthermore, the 3.5% MoM and 13.3% YoY increases are again setting new records, topping last months (which were the highest since 2008).
It should also be noted that the current macroeconomic situation and geopolitical uncertainty are putting a lot of pressure on many types of investments, especially investments into equity. Considering that Croatians hold a very high level of cash in the form of deposits, the above-mentioned growth of deposits is expected.
Breaking the deposits by their components, on a yearly basis, demand deposits increased by 16.3% and amounted to HRK 169.7bn. At the same time, saving deposits increased by 11.1% and amounted to HRK 227.5bn. On a monthly basis, demand deposits grew by 4.1%, while saving deposits increased by 3%.
Meanwhile, if we were to divide saving deposits into domestic and foreign currency deposits, saving deposits in HRK decreased by 10.8% YoY, and 4.1% MoM. This decrease can be attributed to the above-mentioned conversion to the euro in January 2023 and the strong summer tourism season. In a way, higher prices of hospitality real estate and very strong demand meant that during the month, a lot of money inflows have been made. This would also mean that saving deposits in HRK accounted for 12.1% of all saving deposits, which is a decrease of 0.9 p.p. MoM and 3 p.p. YoY. At the same time, foreign currency saving deposits increased by 14.9% YoY, 4% MoM, and ended the month at HRK 199.9bn, close to breaching the HRK 200bn mark. This would also mean that 87.9% of all deposits held were household deposits.
Croatian deposits breakdown (November 2012 – July 2022, HRKbn)
