In 2018, ZABA observed a decrease of 1.6% in net interest and fees, an increase of 4.7% in net fee and commission income and a 95.5% increase in net income.

As ZABA published their 2018 preliminary results, we are bringing you some key takes from the report. According to it, ZABA recorded operating revenues of HRK 5.6bn, which represents an increase of 5.4% YoY. Of that, net interest fees account for 60.6%, amounting to HRK 3.4bn (-1,6%). The decrease could be attributed to a lower net interest margin.

Furthermore, net fee and commission income amounted to HRK 1.4bn, which is an increase of 4.7%. Such an increase could be explained by a rise in card fees, transaction fees and other fees.

When observing operating expenses, they increased by 2.4%, amounting to HRK 2.6bn. Next, ZABA observed a decrease in value adjustments and provisions of 57.1%, amounting to HRK 646m in 2018. Such a decrease could be attributed to ZABA recording very high provisions in 2017 (+65% compared to 2016), and also a decrease in share of bad credit.

This consequently led to an increase in operating profit of 87.1%, amounting to HRK 2.3bn, while net income amounted to HRK 2bn, representing an increase of 95.5%.

ZABA Performance (2015 – 2018) (HRK m)

In 2018, the L/D ratio has continued its declining trend and currently amounts to 79%, as deposits have continued to increase (+11% YoY). Loans, on the other hand, have also increased 6% in 2018, but when observing a longer period, they remain flattish.