As of the end of 2021, the total loans of financial institutions amounted to HRK 280.3bn, representing an increase of 1.7% YoY or 0.1% MoM. In 2022 we expect loan growth to pick as we expect consumers to continue re-leveraging backed by relatively high consumer confidence.
At the end of 2021 financial institutions total loans amounted to HRK 280.3bn, an increase of 1.7% YoY and an increase of 0.1% MoM. Comparing it to 2021 inflation figure of 2.6%, we can says that the growth was moderate. In 2022 we expect loan growth to pick as we expect consumers to increase their leverage backed by relatively high consumer confidence. As pandemic threat subsides, further increase in consumer spending and growth of unsecured consumer loans is expected. Interest rates for secured lending are on their lowest level in the history, so consumers will continue to have incentives to increase their leverage, so housing loans are expected to growth further. This trend was already evidenced in 2021 when household loans, the largest segment of total loans increased by 3.9% YoY. Uncertainty in economic activity imposed by continuation of pandemic in 2021, has resulted in decrease of corporate loans 0.3% YoY.
Corporate and Household Loans Growth Rate (YoY, %)
In total, household loans at the end 2021 amounted to HRK 141.5bn, an increase of HRK 5.3bn in absolute terms, while corporate loans amounted to HRK 86.05bn, a decrease of HRK 235.9m. The main drivers of the increases in household loans were housing loans, which increased by HRK 5.59bn or 9% YoY to HRK 67.77bn, followed by all-purpose loans, which increased by 1.52% YoY or HRK 792.1m, reaching 53.04bn in 2021.
On the flip side, the growth was offset by credit card loans which decreased by-11.3% YoY or HRK 412.8m to HRK 3.25bn as well as overdrafts on transaction accounts, which declined by -4.4% YoY or HRK -283.2m to 6.13bn in 2021. Combined, these four categories amount to 92% of all household loans. Looking over to Other loans, they continued their decline in 2021, decreasing by -4.27% YoY (or HRK 394.4m) and ending the year at HRK 8.85bn.
Loans to households (HRK m)