Thursday, 19 May 2022

HUB Director: We Don't Expect Extremely High Increase In Interest Rates

ZAGREB, 19 May 2022 - Croatian Banking Association (HUB) director Zdenko Adrović said on Thursday that interest rates were not expected to rise extremely high but at rates that most people would be able to bear.

Responding to questions from the press at a HUB conference on the impact of euro adoption on the Croatian financial sector, Adrović said he did not know at what pace interest rates would grow, citing discussions in the Council of Governors at the European Central Bank.

"Some are calling for a quick and sharp increase in interest rates of 0.5 per cent already in July so that there would no longer be negative rates, while others are advocating a slower and milder increase. We will have to wait for the middle of the year," Adrović said.

He said that interest rates would most likely go up, adding that statistically 39 per cent of all loans were agreed at a floating interest rate and 61 per cent at a fixed interest rate. "This means that nothing will happen to those with the fixed interest rate, while in the case of those with the floating interest rate, the changeable part of the interest rate will change, while the margin will remain fixed."

 "We don't expect an extremely high increase, but one that most people can bear. We advise citizens to check their annuities and talk to their bank about the possibility of fixing the interest rate for a future period of three or five years if they want to avoid this risk," Adrović said.


For more, check out our business section

Wednesday, 2 September 2020

Banks Maintaining Credit Activity Despite Pandemic, Says Banking Association

ZAGREB, Sept 2, 2020 - In Croatia, banks have retained their credit activity at almost pre-crisis levels, and in late July lending was up 3.8% on the year while moratoriums on loans to legal entities or rescheduling totaled about HRK 29 billion and to citizens HRK 9.3 billion, the Croatian Banking Association said on Wednesday.

"Data on credit activities at the end of July indicate that the outbreak of the pandemic and recession in Croatia has not resulted in a decrease in lending. The total placements of banks amounted to HRK 234.3 billion at the end of July, which is 3.8% more than in July 2019," the Croatian Banking Association (HUB) said in an overview released on Wednesday.

According to the publication, the total amount of loans issued to households at the end of July was about HRK 135 billion, which is 4.1% more on the year and 0.5% more than prior to the outbreak of the Covid-19 crisis at the end of February.

The increase in some types of lending has accelerated, for example, housing loans recorded an increase of as much as 8.8% y-o-y.

"The data indicate that this year due to market activity a significant increase occurred in the share of housing loans in overall loans (from 43.1% to 44.3%), with the share of loans in the kuna currency increasing from 30.5% to 31.3%," HIB says.

HUB notes that at the end of July housing loans amounted to HRK 59.8 billion, with HRK 18.7 billion being kuna loans and 41.1 billion housing loans pegged to a foreign currency. Most of those, in the amount of HRK 40.5 billion, was pegged to the euro.

Commercial loans to enterprises amounted to HRK 85.6 billion at the end of July or 5% more y-o-y and 2.2% more than prior to the outbreak of the pandemic.

HUB notes that new commercial loans issued in the period from March to July amounted to HRK 64.4 billion, which is an increase of 31.2% compared to gross new loans approved in the same period last year.

Citizens did not reach more for short-term loans (overdrafts, credit cards, etc.) and the gross flows of newly approved loans in that period decreased mildly by about one percent.

Enterprises and citizens applied for loan moratoriums, rescheduling

Citing information from the Croatian National Bank (HNB), HUB notes that at the end of July legal entities had applied for a moratorium or rescheduling of loans valued at HRK 29 billion and that HRK 24.8 billion or 85.6% of the total amount applied for was approved based on special (government) measures. This accounted for 29% of the total credit portfolio for non-financial companies.

Citizens applied for moratoriums on loans valued at just under HRK 9.3 billion, with HRK 7.7 billion, or 82.8% of the total amount applied for and 5.7% of the total credit exposure, being approved under government measures, HUB said.

For the latest travel info, bookmark our main travel info article, which is updated daily

Read the Croatian Travel Update in your language - now available in 24 languages

Join the Total Croatia Travel INFO Viber community.