By the end of September 2023, the total loans issued by the Croatian financial institutions grew by 0.9% MoM, and 6.3% YoY. At the same time, the average housing loan interest rate equaled 3.54%, an increase of 0.08 p.p. MoM, and 0.87 p.p. YoY. Furthermore, the average consumer loan interest rate also grew, by 0.05 p.p. MoM and 0.64 p.p. YoY, reaching 5.92%.
According to the latest report released by the Croatian National Bank, the growth in the amount of loans issued by the Croatian financial institutions continues. This has happened despite the elevated interest rates, whose growth we have seen across the main categories, both household and corporate alike. As such, at the end of September 2023, the total loans issued by all the Croatian banks amounted to EUR 42.6bn, an increase of 0.9% (or EUR 380m) MoM, and 6.3% (or EUR 2.5bn) YoY.
Breaking this growth into the two main categories, i.e. household and corporate, we can see that growth was recorded across both categories, including on a MoM and YoY basis. For households, they grew by 0.9% MoM, 7.5% YoY to EUR 21.2bn. On the other hand, corporate loans grew by 0.1% MoM, and 6.7% YoY, reaching EUR 14.4bn.
Corporate and household loans growth rate (January 2015 – September 2023, %)
Source: HNB, InterCapital Research
Delving further into the corporate loans, on an MoM basis, working capital and investment loans recorded increases, of 0.7% and 0.9%, respectively, while other loans category decreased, by 0.7%. Meanwhile, on a YoY basis, all 3 categories recorded growth, at 2.7% for working capital loans, 7.9% for investment loans, and 12.6% for the other loans category. This would mean that despite the increase in interest rates and pressure on companies due to higher costs, they’re still willing to use loans to finance their operations and future investments.
Moving on to household loans, the largest absolute MoM increase was recorded by housing loans, which grew by 0.8%, or EUR 81.7m, followed closely by consumer loans, at EUR 81.5m, or 1.1%, as well as the other loans category, which increased by EUR 10.6m, or 0.8%. Furthermore, on a YoY basis, housing loans were once again the category that grew the most, at 9.9% or EUR 962m. Following them there are consumer loans at 8%, or EUR 578m, and other loans, at 4.3%, or EUR 54m.
Composition of Croatian loans to households (October 2011 – September 2023, EURm)
Source: HNB, InterCapital Research
To fully understand the story, however, we should also look at the other side of the loan equation, that is interest rates. For households, the average housing interest rate for a new loan amounted to 3.54% in September 2023, an increase of 0.08 p.p. MoM, and 0.87 p.p. YoY. Consumer loans also grew, by 0.05 p.p. MoM, and 0.64 p.p. YoY to 5.92%. Finally, the corporate loan avg. interest rate decreased by 0.09 p.p. MoM, but increased by 2.2 p.p. YoY, amounting to 4.89%.
Average new housing and corporate loan interest rates (December 2011 – September 2023, %)
Source: HNB, InterCapital Research
