At the end of June 2023, the average housing loan interest rates increased by 0.81 p.p. YoY, consumer loan interest rates by 1.28 p.p., and corporate loan interest rates increased by 3.1 p.p. YoY. At the same time, the total amount of loans issued by all the Croatian financial institutions amounted to EUR 41.9bn, representing a slight 0.2% decrease MoM, but an increase of 6.8% YoY.
Recently, the Croatian National Bank published the latest monthly report on Croatian financial institutions, including data related to loans. According to the report, the total amount of loans issued by all Croatian institutions as of June 2023 amounted to EUR 41.9bn, which would imply an increase of 6.8% YoY, but a decrease of 0.2% MoM.
Looking at the changes more closely, we can see that both corporate and household loans contributed to this change. On a YoY basis, the number of corporate loans issued amounted to EUR 1.64bn, representing an increase of 12.9%, while household loans increased by EUR 1.13bn, an increase of 5.8%. Meanwhile, on a monthly basis, corporate loans recorded a slight decrease of 0.25%, or EUR 35.9m, while household loans increased by EUR 156.4m or 0.8%.
Corporate and household loans growth rate (January 2015 – June 2023, %)
Source: HNB, InterCapital Research
Breaking these categories down even further and first looking at corporate loans, we can see that working capital loans still continued to increase, both on a MoM and YoY basis, while investment loans and other loans recorded a MoM decrease, but still continued growing on a YoY basis. In total, investment loans, the largest category of corporate loans amounted to EUR 5.62bn, representing 39.1% of the total, and decreasing by 0.42% MoM, but increasing by 9.37% YoY. The 2nd largest category, working capital loans, amounted to EUR 4.48bn, representing 31.2% of the total, and growing by 0.93% MoM, and 2.28% YoY. Finally, the other loans category amounted to EUR 4.28bn, representing 29.8% of the total, and decreasing by 0.8% MoM, but increasing by 33.7% YoY. In terms of households, housing loans still represent the largest category at EUR 10.3bn (49.8% of the total household loans), with growth of 1.42% MoM, and 9.06% YoY. Following them we have consumer loans, which amounted to EUR 7.57bn, growing by 0.93% MoM, and 5.34% YoY.
Composition of Croatian loans to households (October 2011 – June 2023, EURm)
Source: HNB, InterCapital Research
Meanwhile, average interest rates on newly issued loans have steadily been increasing, with growth recorded both on MoM, as well as YoY basis. As such, the average housing loan interest rate amounted to 3.07%, an increase of 0.10 p.p. MoM, and 0.81 p.p. YoY. Consumer loans interest rate amounted to 5.63%, an increase of 0.03 p.p. MoM, and 1.29 p.p. YoY, and finally, average corporate loan interest rate amounted to 4.91%, an increase of 0.26 p.p. MoM, and 3.1 p.p. YoY.
Average new housing and corporate loans interest rate (December 2011 – June 2023, %)
Source: HNB, InterCapital Research
Taken together, this would mean that despite the ever-growing interest rate environment, the demand for loans is still present, both for households and corporate clients. What is interesting to note, however, is the growth in the interest rate on the corporate side, which surely had an impact on newly taken loans for investments and other activities, except the working capital loans which have to be taken due to business requirements.
