In the latest report on the performance of the Croatian financial institutions released by HNB, we can see that the Croatian loans grew by 0.2% MoM, and 5.2% YoY, reaching a total of EUR 44.7bn. Furthermore, interest rates for the primary loan categories have grown on a yearly basis, but the increase has largely stabilized in the last couple of months. In this overview, we’re bringing you all the details regarding the developments of the Croatian loans.
According to the latest report released by HNB on the performance of Croatian financial institutions, the Croatian loans amounted to EUR 44.7bn in August 2024, growing by 0.2%, or EUR 11.2m MoM, and by 5.2%, or EUR 2.2bn YoY.
In other words, while the growth in loans continues, it has largely stabilized recently, in line with the trends of other European countries and their banking systems. At the same time, the recent rate cuts, and the expected rate cuts in the future by ECB are also putting positive pressure on the loan interest rates. However, it should be noted that after a rate hike/cut, it usually takes months before loan interest rates adjust. This is also influenced by customer sentiment, which despite the geopolitical and macroeconomic situation, is far more positive than it was a year, and especially two years ago. Breaking the loans down into the two most important categories, i.e. household and corporate loans, both categories recorded YoY growth, while the MoM data is more mixed. Starting off with the larger category, that is household loans, in total they amounted to EUR 23.8bn in August 2024, growing by 0.6% MoM, and 10.6% YoY. On the other hand, corporate loans amounted to EUR 14.9bn during this period, declining by 0.5% MoM, but growing by 3.3% YoY.
Corporate and household loans growth rates (January 2015 – August 2024, YoY, %)
Source: HNB, InterCapital Research
Delving deeper into these categories, inside the household loans, housing loans still make up the largest share, at 49.3% of the entire household loans, or EUR 11.5bn in absolute amounts. This category also grew by 0.6% MoM, and 8.6% YoY, demonstrating that despite the high interest rates, there is still strong demand for housing loans. Next up, we have consumer loans at EUR 8.8bn, or 38% of the total, with growth rates of 0.7% MoM, and 15.2% YoY. Due to this, consumer loan growth actually outpaced the growth in housing loans, which was not a situation a year ago at any point. One other notable category is the other loans category, which amounted to EUR 1.4bn, or 6% of the total, with a decrease of 0.6% MoM, but an increase of 7.4% YoY.
Composition of Croatian loans to households (October 2011 – August 2024, EURm)
Source: HNB, InterCapital Research
Moving on to corporate loans, these are broken down into 3 main categories, i.e. working capital loans, investment loans, and other loans. In August 2024, the largest MoM growth was recorded by investment loans, which grew by 0.5% to EUR 6.3bn, followed by the other loans category, which increased by 0.2%, to EUR 3.97bn. On the other hand, working capital loans noted a 2.2% decrease MoM to EUR 4.7bn. On the other hand, on a yearly basis, investment loans again grew the fastest, at 9.7%, or EUR 554m, followed by working capital loans, with an increase of 4.9%, or EUR 220m, while the other loans category noted a decrease of 6.4%, or EUR -273m.
Lastly, taking a quick look at the loan interest rate environment, we can see that the situation has largely stabilized. As of August, the interest rate on new housing loans amounted to 3.75%, remaining unchanged MoM, and growing by 0.29 p.p. YoY. Consumer loans noted a slight increase MoM of 0.04 p.p., and a larger 0.18 p.p. growth YoY, with an interest rate of 6.05% on new consumer loans. The only category to note a drop was the corporate loans, which carried an interest rate of 4.71%, a decrease of 0.19 p.p. MoM, and 0.27 p.p. YoY.
Average new housing and corporate loan interest rates (December 2011 – August 2024, %)
Source: HNB, InterCapital Research
