By the end of February 2023, the total loans of all Croatian financial institutions amounted to EUR 41.5bn, which would amount to an increase of 10.7% YoY, and 0.42% MoM.
Recently, the Croatian National Bank, HNB, published its latest monthly report on the developments and changes recorded by Croatian financial institutions, including the data for loan changes and interest rates. According to the report, in February 2023, the total loans of all Croatian financial institutions amounted to EUR 41.5bn, representing an increase of 10.7% YoY, and 0.42% MoM.
This would mean that despite the current macroeconomic environment, which has already caused a slowdown in loan issuance across Europe, the demand for loans is still present and resilient in Croatia. This growth was mainly supported by the development of household and corporate loans. Starting off with the household loans first, they amounted to EUR 19.9bn in February 2023, growing by 0.39%, or EUR 78.4m MoM, and 5.33%, of EUR 1bn YoY. On the other hand, corporate loans amounted to a total of EUR 14bn, increasing by 0.84%, or EUR 117.3m MoM, and almost 20%, or EUR 2.3bn YoY. Here we can see that the main driver of the overall loan growth remains the corporate clients, who need funding for this such as investments, working capital, or any other type of funding, depending on the company and situation. What’s also interesting is the fact that this growth isn’t slowing down, which is quite contrary to a lot of information that can currently be heard in the news, such as the expected slowdown in the economy, and the potential for failures of companies across sectors. As mentioned, this has yet to happen, at least by this metric.
Corporate and household loans growth rate (January 2015 – February 2023, %)
Source: HNB, InterCapital Research
To better understand this, one can also take a more detailed look at the corporate loan issuances, also provided by the central bank. The breakdown includes an overview of the companies by size, but also by the purpose of loans. Here we are more interested in the loans by purpose, with the main three categories being loans for working capital, investment loans, and other loans. Of these three categories, investment loans are the largest, standing at EUR 5.6bn, and increasing by 0.73% MoM, and 16.2% YoY. Next up, we have working capital loans, which amounted to EUR 4.4bn in February 2023, an increase of 0.9% MoM, and 15.6% YoY. Finally, other loans amounted to EUR 4.1bn, representing an increase of almost 1% MoM, and 31.1% YoY. As we can see, all categories of corporate loans are increasing significantly, both on a monthly but especially on the yearly basis.
Turning our attention to households, housing loans still constitute a majority (almost 50%), amounting to EUR 9.9bn in February 2023. This represents an increase of 0.3% MoM, and 9.7% YoY. Following them, we have consumer loans, which with the amount of EUR 7.26bn, accounted for 36.3% of all household loans. This would also amount to an increase of 0.81% MoM, and 2.4% YoY.
Composition of Croatian loans to households (October 2011 – February 2023, EURm)
Source: HNB, InterCapital Research
Finally, taking a look at the interest rate development, in February 2023, interest rates on newly issued housing loans amounted to 3.17%, an increase of 0.56 p.p. YoY, and 0.21 p.p. MoM. On the other hand, newly issued corporate loans had an interest rate of 3.92%, an increase of 2.34 p.p. YoY, and 0.55 p.p. MoM.
Average new housing and corporate loan interest rates (December 2011 – February 2023, %)
Source: HNB, InterCapital Research
