At the end of March 2023, the total loan amount of all Croatian financial institutions equaled EUR 41.7bn, representing an increase of 9.9% YoY, and 0.37% MoM.
The Croatian National Bank has published its latest monthly report on the changes recorded by the Croatian financial institutions, for the month of March 2023. In the report, we can see that the total amount of loans of all Croatian financial institutions amounted to EUR 41.7bn, which would mean that they grew by 9.9% YoY, and 0.37% MoM.
Breaking this growth down further, we can see that the largest contribution came from the loans issued to both households, as well as corporate clients. In fact, by the end of March 2023, household loans surpassed EUR 20bn mark, amounting to EUR 20.1bn, an increase of 1.0% (or EUR 202.9m) MoM, or 5.5% (or EUR 1.06bn) YoY. Corporate loans also continued their growth momentum, albeit slowing down on a monthly basis, with a growth of 0.24% (or EUR 33.7m), while on a YoY basis, they grew by 15.2% (or EUR 1.85bn). In total, the loans issued to corporate clients amounted to EUR 14.04bn.
Corporate and household loans growth rate (January 2015 – March 2023, %)
Source: HNB, InterCapital Research
Breaking the corporate loans further into 3 main categories, i.e. working capital loans, investment loans, and other loans, we can take a more detailed look at this development. The largest of these categories, investment loans, which accounted for 39.9% of the total corporate loans, increased by 0.91% (or EUR 50.7m) MoM, and 13.6% (or EUR 670.4m) YoY. The 2nd largest category, i.e. working capital loans (which account for 30.8% of the total) recorded a decrease of 1.0% (or EUR 44.9m) MoM, but an increase of 7.1% (or EUR 287m) YoY. Finally, the other loans category which accounts for the remaining 29.3%, recorded an increase of 0.68% (or EUR 27.9m) MoM, and 27.7% (or EUR 890.7m) YoY.
The increase in corporate loans is quite a good sign, especially in the current macroeconomic environment of high interest rates and geopolitical uncertainty. The continued growth of investment loans in particular is a piece of positive news, as these ones yield returns in the future, while the decline in working capital loans can be attributed to the seasonality & requirements of individual companies, and doesn’t have to represent a negative trend.
Moving on to households, housing loans still account for the majority of these loans (49.7% of the total) and have surpassed EUR 10bn mark for the first time in March 2023, increasing by 0.55% (or EUR 54.3m) MoM, and 9.48% (or EUR 866m) YoY. Next up, we have consumer loans, which with EUR 7.36bn account for 36.6% of household loans. These loans have increased by 1.4% (or EUR 103.2m) MoM, and 3.3% (or EUR 234.7m) YoY.
Composition of Croatian loans to households (October 2011 – March 2023, EURm)
Source: HNB, InterCapital Research
Taking a look at the value and volume of loans issued would not make much sense without looking at one of the most important factors influencing this development, the interest rates. Given that Croatia is part of the Eurozone, the interest rate hikes we are witnessing by the ECB will have an influence on the interest rates of newly issued loans. On average, the newly issued housing loans had an interest rate of 2.92%, representing an increase of 0.43 p.p. YoY, but a decline of 0.25 p.p. MoM. Consumer loans meanwhile, remained roughly unchanged MoM, but recorded an increase of 1.13 p.p. YoY, amounting to 5.45%. Finally, average corporate loan interest rates amounted to 3.92%, remaining unchanged MoM, but increasing by 2.19 p.p. YoY.
Average new housing and corporate loans interest rates (December 2011 – March 2023, %)
Source: HNB, InterCapital Research
