Wednesday, 9 November 2022

How to Croatia - Getting an OIB and Opening a Bank Account

November the 9th, 2022 - In our latest edition to our How to Croatia series, we look into how to get a personal identification number (OIB) and open a Croatian bank account as a resident.

It appears that wherever we may roam on this tiny blue dot taking trips around the sun, we end up ‘roaming’ into a taxman. Croatian taxes are the bane of society for a multitude of reasons, but I won’t get into that now. Once you’ve got your residence permit, you’ll need what’s known as an OIB to be able to work, open a bank account, and do just about anything. You can obtain an OIB without residence, too, or before you embark on the residence process.

What is an OIB?

An OIB, or personal identification number (or tax number) is a little bit like a national insurance number (you’ll know what I mean if you’re British), but you’ll end up using it so much in Croatia that you’ll likely end up remembering it. Does anyone else never look at their UK NI? Christ only knows what mine is. The funny thing is that I’ve used my OIB so often that I know it back to front. Bit sad, really. Anyway, back to the point! An OIB is very easy to get, you can simply visit your local tax office (porezna uprava) and ask for one. You’ll just need your passport or other form of government-issued ID.

You can also make the request for an OIB online by visiting porezna-uprava.hr and selecting ‘Dodjeljivanje OIBa’ (Assigning an OIB), then selecting English language as your language of choice (EN).

Getting an OIB assigned to you is so easy that if you’ve gone through the residence process first, you might think you’ve done something incredibly wrong. You haven’t. This is one of those situations in Croatia that seems too simple to be true. Cherish them, they happen at random and are kind of few and far between.

Once you have an OIB, you can open a Croatian bank account as a resident.

Opening a Croatian bank account

There are numerous banks available in Croatia, with the Croatian National Bank (Hrvatska narodna banka or HNB/CNB for short) serving as the independent regulator of commercial banks operating in the country. 

The CNB was established as part of the Croatian Constitution which was passed by Parliament on the 21st of December, 1990. It issues banknotes, holds the national monetary reserves, aims to maintain stability and ensures the financial liquidity and soundness of the country’s financial system. The CNB joined the European System of Central Banks and started performing its role under the Statute of the ESCB and the ECB, following Croatia’s entry into the European Union back in July 2013.

Some of the most popular banks in Croatia are Privredna banka Zagreb (PBZ), Zagrebačka banka, Erste & Steiermärkische bank, Raiffeisenbank Austria Zagreb (RBA), and Hrvatska poštanska banka (HPB). There are of course others, such as Addiko bank and OTP, but there’s no need to list them all. Many banks are foreign owned, and those such as Erste are very popular with expats thanks to their ease of use, very good mobile app, and good customer service. There are English language options on banking apps and on their websites.

To facilitate your transactions (paying rent, paying the bills) to receive your Croatian salary and have a local bank card, and to do literally anything financially, you’ll need a Croatian bank account.

What do I need to open an account?

To open a bank account in Croatia, you’ll need an OIB. Generally speaking, you’ll need a valid passport, your residence permit (either your ID card or your registration certificate, if your card isn’t yet finished) and the bank’s application form that you can find online or get directly at the bank to open a bank account as a foreign national. Most of the staff working in banks speak a decent level of English, so you shouldn’t have any communication difficulties. The process is fairly quick.

Types of Croatian bank accounts, apps and online banking

The most typical account types are giro, current and savings account. Some banks offer automatic overdrafts once you open an account, while in others you have to apply for an overdraft once the account has been set up.

As stated, most banks offer online and mobile banking services, which comes in handy when paying the bills, for example, because you can simply scan the QR code that can be found on every payment slip and the payment information is filled in automatically, so you simply have to authorise the payment, click send and the job’s done.

Bank loans for foreigners

Applying for a bank loan is a modern reality in a society which lives increasingly on credit. Inflation and spiralling prices are likely to force more and more people to live this way. Croatia is no exception in putting things on the plastic, even though so many people still love to carry cash, and of course, some cafe bars, pubs and even restaurants like to pretend their POS machines are broken until the tourist season arrives. You can probably guess why... Despite that, many Croatian households of all classes have loans from the bank for a variety of different reasons.

I’ll be blunt, the procedure for getting a bank loan in Croatia is not simple. There are many hoops to jump through, requirements to satisfy, papers to obtain and time to kill, at least in the bank’s eyes. Unless you are armed with an extra dose or ten of patience (or you’ve been sedated), you have a particular masochistic passion for providing people with documents, copies of said documents and filling out forms with half-chewed pens stuck to tables by strings, frustration will be your main companion and your eyes will probably see more of the back of your skill than much else, you know, what with all the rolling they’ll be doing.

Many doe-eyed, would-be foreign buyers of Croatian property seek to borrow funds from the bank to help with their purchases. Despite lots of promises and stringing along, there is still no mortgage product on offer in Croatia for foreign buyers, so please, please, bear this in mind.

Opening times

Opening times for banks will be clearly displayed on their doors, their websites and their apps. Be aware that Croatia is the land of religious holidays, bank holidays, and random days where things just aren’t open. Those days can of course affect the operating hours of banks. Luckily, many things can now be resolved online and through mobile banking, thanks to virtual assistance and even instant chats.

ATMs

Just like across the vast majority of the rest of this modern, fast-paced world, ATMs can be found all over in Croatia, they have even been ‘evicted’ from the hearts of ancient towns like Dubrovnik. You’ll have no problem finding one, and the vast majority (if not all of them) have different language options you can select before withdrawing cash or checking your balance. Do keep in mind that different banks have different limits on how much cash you can withdraw in any given 24 hour period, so make sure to check what yours is.

 

For more on How to Croatia, from adopting pets to getting health insurance, make sure to keep up with our lifestyle section.

Wednesday, 14 September 2022

Croatian Banks Send Out Important Info Regarding Euro Introduction

September the 14th, 2022 - Croatian banks have sent out some important information to their customers and clients regarding Croatia's rapidly approaching accession to the Eurozone, which is set to take place on the very first day of 2023.

As Poslovni Dnevnik writes, PBZ sent its clients and customers a notice related to Croatia's upcoming introduction of the euro, in which they specify the essential elements for conversion that will be applied in the conversion of the Croatian kuna to the new single currency of the Eurozone.

"On the day of the introduction of the euro in Croatia, the bank will automatically and without charge carry out the conversion of funds held in Croatian kuna in bank accounts, deposits, loans and other financial statements of value at a fixed conversion rate of one euro = 7.53450 kuna,'' the bank stated.

''The conversion will be carried out by applying the rules for conversion and rounding in accordance with the Law on the Introduction of the Euro as the Official Currency in the Republic of Croatia. In addition to that, according to the principle of continuity of contracts and other legal instruments, the introduction of the euro will not affect the validity of existing contracts on loans, deposits and savings in kuna, etc., meaning that no new contracts need to be concluded. The goal is to carry out the process of introducing the euro and the activities resulting from it in such a way as to ensure the simplest possible treatment for everyone,'' it added.

The period of the obligation to display prices twice (in both Croatian kuna and euros) to consumers began on September the 5th, 2022 and ends twelve months after the introduction of the euro in Croatia.

Of the other Croatian banks which have sent out information on Croatian Eurozone accession to their clients, Zagrebacka banka made similar statements: "On the day of the introduction of the euro as the official currency of Croatia, monetary values ​​expressed in kuna on custodial and brokerage accounts will be converted into euros by applying the rules for conversion and rounding defined by the Law."

Erste Bank also informed its customers about the currency change, according to a report from N1.

For more, make sure to check out our dedicated lifestyle section.

Sunday, 31 July 2022

Hrvatska Postanska Banka's Organic Growth Sees it Pushed Forward on Market

July the 3st, 2022 - Hrvatska Postanska Banka has been pushed forward significantly on the market owing to its organic growth and the excellent business being done, not to mention a new acquisition.

As Poslovni Dnevnik writes, during the first six months of 2022, Hrvatska Postanska Banka achieved strong growth in terms of the wider HPB Group's assets and the acquisition of Nova Hrvatska Banka (New Croatian Bank), which is now successfully operating. All of the above has significantly strengthened its overall market position.

After a record 2021, a ten digit net profit of 1.066 billion kuna was realised at a consolidated level as a result of income due to acquisition activities and profit creation at the bank's level. A significant increase in property of 7.7 billion kuna indicates a strong step towards the entry of HPB into the top five banks per total assets on the entire Croatian market.

The main factors of the record positive results of the wider Hrvatska Postanska Banka Group in the first six months of 2022, in addition to the effects of acquisition activities, were the profits made from business even in these dire circumstances of growing inflation and the cost of adjusting business for the introduction of the euro in 2023. Hrvatska Postanska Banka successfully annulled the unfavourable effects of the drop in the price of bonds caused by the announcement of a change in monetary policy to restrain inflation and continued to implement the multitude of strategic projects of the HPB Group.

Back on March the 1st, 2022, the Hrvatska Postanska Banka took over Sberbank d.d., now called Nova Hrvatska Banka, which enabled it to stabilise its business, in that it also secured the preservation of its property and the property of its clients.

A significant increase in the Hrvatska Postanska Banka deposit and the stabilisation of Nova Hrvatska Banka's business, after them having taken it over, contributed to a much more favourable liquidity position and the strengthening of the potential to continue the realisation of a planned market share. The complementary and quality credit portfolio of Nova Hrvatska Banka has also further strengthened the stable and growing credit portfolio of HPB in almost all possible segments.

In addition to the record low level of the stake in unchanging loans, the activities of the diversification and increase in the quality of the bank's card products are reflected in the growth of total revenue from 7.7% fees that have mitigated the drop of net interest income of 6.0% (unconsoilidated) provided by a competent environment.

Thanks to cooperation with a strategic partner, Croatian Post (Hrvatska posta), Hrvatska Postanska Banka has continued to increase the availability of its financial services to different segments of clients even in the smallest and most remote rural locations that have a post office available.

For more, make sure to check out our dedicated business section.

Friday, 15 April 2022

Nova Hrvatska Banka/New Croatian Bank Begins Operations

April the 15th, 2022 - Nova Hrvatska Banka, or the New Croatian Bank, is set to start operations formally within the wider Hrvatska postanska banka (HPB) group following a long and extensive rehabilitation process.

As Poslovni Dnevnik writes, after a record year in which it achieved the best net profit in history in the amount of 202 million kuna, asset growth of 27.9 billion kuna and a capital adequacy ratio of 25.7 percent, Hrvatska postanska banka successfully implemented another demanding project - the rehabilitation of Sberbank d.d., more precisely the future New Croatian Bank d.d.

The Council of the Croatian National Bank (CNB/HNB) has made a decision on the successful completion of the rehabilitation procedure, which will formally start the New Croatian Bank's operations as Nova hrvatska banka d.d. within the HPB group. With this takeover, the completion of the rehabilitation process and the merger of the New Croatian Bank, HPB is ultimately strengthening its future position here on the Croatian market. The rehabilitation process itself was completed in a short time and the bank has been stabilised and is operating successfully.

Implementing this demanding process is a new step in strengthening HPB's business overall. As a new member of the HPB group, the New Croatian Bank brings with it a significant customer base, a complementary portfolio and additional strength for business growth and further expansion.

"After the record result we had last year, we believe that the synergy effects will bring new benefits to our customers, shareholders and employees," said Marko Badurina, President of the Management Board of HPB.

The Management Board of the New Croatian Bank was appointed as follows: Tadija Vrdoljak, President of the Management Board, Boris Bekavac and Ognjen Brakus, members of the Management Board.

For more on Croatian banks and financial institutions, make sure to check out our dedicated business section.

Wednesday, 13 April 2022

Croatian Banks Continue to Create Stricter Loan Conditions

April the 13th, 2022 - Croatian banks are placing stricter and stricter conditions on those they provide loans to as rising interest rates are anticipated by the financial system.

As Marina Klepo/Jutarnji/Novac writes, in anticipation of rising interest rates, customers of Croatian banks are already noticing heightened caution, and loan offers are somewhat less "generous", especially when it comes to cash loans. As such, some clients have been noticing quite an unusual trend - larger Croatian banks refer them to smaller ones, which have less rigorous procedures, and often lower interest rates.

The Croatian National Bank's comparative list of credit terms shows that "cash" can now be obtained in sixteen different banks, but only half of them, the smaller and medium-sized ones, actually offer fixed and variable interest rates. Today, all large Croatian banks are approving these loans exclusively at a fixed interest rate.

In an effort to protect themselves from increased repayment installments, many people over more recent years have decided to take out loans with fixed interest rates, not only for long-term housing loans, but also for non-purpose cash loans, which are now mostly being approved for a period of ten years. Over the past year and a half, judging by the Croatian National Bank's comparative list, it's fairly clear that large banks have eliminated variable interest rates that were more favourable. The reason for this could be the effort to keep the existing, very high interest rates, as they are.

In the case of kuna cash loans, the fixed interest rate effectively (with all costs) ranges from 5.5 percent, as offered by two small Croatian banks, Imex and Karlovacka banka, to as much as 7.32 percent in Zagrebacka banka and 7.49 percent in Samoborska banka. Since October last year, Croatian banks have slightly revised their fixed interest rates, some are higher, some are lower. For Zagrebacka banka, for example, their interest rate was raised from 7.16 to 7.32 percent, for RBA it was lowered from 7.42 to 6.9 percent, while a number of banks kept about the same figures.

The real boom in approving these loans occurred back in 2018 and 2019, when they increased by about 5.5 billion kuna per year. Today, the total amount of these loans, according to the Croatian National Bank for the month of February 2022, reached 53.4 billion kuna, while the amount of housing loans amounted to 68.3 billion kuna.

Who are the clients of Croatian banks who are taking out cash loans? A recent Croatian National Bank survey "Which loans do we take? A microanalysis of Croatian household debt" shows that more expensive loans are more often used by households whose income isn't sufficient to finance their current consumption. It's very likely, the study concludes, that some households use “unsecured loans” to consolidate overdrafts or credit card debts, and for most households these efforts have proved unsuccessful. In the end, they end up with even more indebtedness.

In some cases, people took out cash loans and to, at least in part, finance the purchase of properties. Since the beginning of the coronavirus pandemic, interest in cash loans has fallen sharply and banks have approved many more housing loans. According to the latest Croatian National Bank data for that same month of February, housing loans were eight percent higher than they were back in the same month last year, slightly slower than they were in January, when the growth rate was 8.4 percent, and non-purpose cash loans accelerated slightly, from 3.3 to 3.4 percent.

When it comes to housing loans, Croatian banks still offer all kinds of interest rates, and they generally range from three to four percent. Those who need a smaller amount, up to 500,000 kuna, can currently get the best loan from the Istrian Credit Bank.

For more, check out our lifestyle section.

Monday, 7 March 2022

RBA Marks Down Forecast of Croatia's 2022 GDP Growth to 4%

7 March 2022 - Raiffeisenbank Austria (RBA) analysts on Monday revised down their estimate of Croatia's economic growth in 2022 from 4.4% to 4%, underscoring uncertainty and negative risks, particularly regarding investments.

The analysts said that in light of the war in Ukraine and growing uncertainty, their forecast for the euro area economy has been marked down by 0.7 percentage points to 3.3%.

"The expected trends will have a negative, albeit a limited impact on Croatia's GDP. In the scenario that excludes the possibility of the war spreading to other countries of the EU and/or Western Balkans and implies, at least for the time being, that the tourism season will be successful, the forecast for the real annual GDP growth rate for 2002 has been revised from 4.4% to 4%," the analysts said.

The analysts however remain cautious, underscoring uncertainty and negative risks, particularly with regard to investments.

Inflation in 2022 at 4.9%

They also see a more significant risk in the spilling over of the global increase in energy and food prices, and have therefore revised up their inflation forecast.

RBA estimates that this year's inflation rate in Croatia will be 4.9% whereas previously it was forecast at 3.6%.

Data from the Croatian Bureau of Statistics (DZS) indicated an increase in inflation of 5.7% in January this year compared to January 2021, which is the highest increase since October 2008.

"We expect that this year will see stronger inflationary pressure, directly on food prices, and that the impact of price growth on producers will also affect consumers, which will negatively impact available income. In such circumstances we cannot rule out the possibility of additional fiscal support," the analysts said.

Thursday, 3 March 2022

Croatian HPB Takes Over Sberbank, Clients Can Breathe Easy

March the 3rd, 2022 - Following alarming reports of Zagreb and Split residents lining up outside Sberbank branches to withdraw any cash they had in accounts there after harsh sanctions were imposed by most of the world on Russia, the Croatian HPB has taken over and clients can now breathe easy.

As Poslovni Dnevnik writes, Croatian Sberbank clients' money is safe yet again, and business conditions remain unchanged. On Wednesday, March the 2nd, at 12:00, the bank opened its branches for all of its clients and continued its regular operations as part of the HPB Group,'' the statement reads.

"We reacted in an extremely short time and enabled our fellow citizens to freely deposit their funds. At the same time, the acquisition of Sberbank strengthens the Croatian HPB's future position on the market, which is great news for our employees and shareholders alike. As of today, our new clients can continue to use all of their financial services normally, without any restrictions, and as such I'd like to congratulate everyone who did their best to resolve this situation as soon as possible,'' said HPB CEO Marko Badurina.

The Croatian National Bank (CNB/HNB) announced earlier not so long before that that the Single Resolution Committee had made a decision on Tuesday, in co-operation with the Croatian National Bank as the national resolution authority, initiating the resolution process over Sberbank d.d. Zagreb, and the new owner is now the Croatian HPB (Hrvatska postanska banka).

HPB is one of the leading banks in the Republic of Croatia, and back in 2021 it achieved the best result in 30 years of the bank's history and a record net profit of 202 million kuna.

HPB pointed out that this bank is one of the leaders in innovation and digitalisation of the sector, and for many years it has stood out as the most active in the programme of subsidised housing APN loans.

For more, make sure to check out our lifestyle section.

Monday, 28 February 2022

New Zagrebacka Banka Instant Payment Option Introduced for Clients

February the 28th, 2022 - A brand new Zagrebacka banka instant payment service has been introduced for the clients of this Croatian bank, be they business or private customers.

As Poslovni Dnevnik writes, Zagrebacka banka has introduced a new instant payment service for all its private and business users who have transaction accounts with the bank, and the new Zagrebacka banka instant payment service will be able to be used for up to a maximum of 100,000 kuna. Instant payments in Croatia can be made in the Croatian national currency (kuna), and can be carried out every day, including during weekends, over bank holidays and on public holidays.

Clients of Zagrebacka banka will thus be able to execute their transactions in almost real time, meaning in just a few seconds. Instant payments are made by online banking via a mobile application (m-zaba) and the Internet (e-zaba), through existing forms of Zagrebacka bank account, and then by checking the ''instant payment'' option.

Filling out Zagrebacka banka instant payment orders will be exactly the same as it is with standard payment orders, and the payer can immediately see if their payment has been successfully completed and sent to the correct individual.

For example, if a client needs to pay money on Friday night to a person who has a transaction account with another bank, it would have been an issue owing to bank processing times. Until now, it would have been necessary to wait until Monday to see the money appear in the desired bank account.

Now, with the introduction of this new Zagrebacka banka instant payment service, the money heading for the recipient's account will be available immediately. Payments are made through NKSInst, a national clearing system for instant payments developed by the Financial Agency (Fina) and approved by the Croatian National Bank (CNB/HNB).

For more on Croatian banks and their services, make sure to check out our dedicated lifestyle section.

Wednesday, 16 February 2022

Central Bank Warns of Continued Financial Stability Risks

ZAGREB, 16 Feb 2022 - Financial stability risks remain increased compared to the period before the crisis due to uncertainties surrounding the end of the pandemic, rising inflation, residential real estate price hikes, and geopolitical risks, the Croatian National Bank (HNB) Council concluded on Wednesday.

The economy continued to grow in the last quarter of 2021, albeit at lesser intensity than previously in the year, with industrial production increasing, while the real retail turnover and construction stayed at Q3 levels, the HNB said in a press release.

In Q4 2021, employment continued to increase while the unemployment rate dropped, making their levels better than before the pandemic. Nominal pay growth also continued to accelerate, while inflation resulted in a decrease of the real pay average.

In December, the annual inflation rate increased to 5.5% from 4.8% in November. Higher food prices contributed the most to that. Together with energy prices, they are increasingly influencing inflation.

The continuation of expansionary monetary policy continues to stimulate the fall of banks' interest rates. Keeping interest rates on the money market at zero is accompanied by a mild increase in sovereign bond yields.

At the end of last year, bank lending increased 3.9% year on year, just as it did at the end of 2020. Household lending went up from 2.1% in December 2020 to 4.5% last December, primarily as a result of a strong increase in housing loans. Corporate lending decreased from 5.6% to 2.3%.

Although a strong economic recovery enabled a gradual revocation of government aid to businesses, new waves of the pandemic continue to cause problems in global supply chains, stimulating price growth.

Hence, there is a prominent risk of long-term inflationary pressures and higher inflation than currently forecast, which could prompt a faster and stronger tightening of the monetary policies of the largest monetary markets' central banks.

Increased volatility on financial markets at the start of this year is reflected in uncertainty about inflation trends, the evolution of monetary policies and expected interest rate growth.

Residential real estate prices increasingly further from fundamentals

Last year saw a strong increase in housing loans in Croatia as well as residential real estate prices, which went up to 9% in Q3. Those prices are moving further and further from long-term trends and macroeconomic fundamentals, increasing the risk of their fall in case of economic disruptions.

Increased household borrowing is accompanied by relatively mild borrowing standards which again this year, will be supported by government subsidies. These may, at the start of the repayment period, pose a smaller burden on borrowers but when the subsidies expire, they increase repayment costs as well as vulnerability to possible shocks.

In response to the continued accumulation of cyclical systemic risks, notably the rise in residential real estate prices and housing lending, the HNB has announced increasing the countercyclical capital buffer rate for Croatia from 0% to 0.5% as of 31 March 2023.

The aim is to set aside additional capital in time in order to boost the resilience of credit institutions to possible losses due to cyclical risks, the press release said.

For more, check out our business section.

Friday, 11 February 2022

Zagrebacka Banka Instant Payment Option to Make Life Easier for Clients

February the 11th, 2022 - The new Zagrebacka banka instant payment offer is likely to delight the popular bank's clients, making life much easier when sending money quickly and easily in amounts up to 100,000 kuna.

As Poslovni Dnevnik writes, the brand new Zagrebacka banka instant payment option has been introduced as a new service intended for all its private and business users who have transaction accounts. They can execute their payments with this new option up to a maximum of 100,000 kuna. Zagrebacka banka instant payment is available here in Croatia and are possible in kuna despite the country's impending Eurozone accession, and can also be carried out every day, including weekends, bank holidays and public holidays.

Clients of Zagrebacka banka will thus be able to execute their transactions in almost real time, meaning in just a few seconds. Zagrebacka banka instant payment transactions are made by online banking via the mobile application (m-zaba) and on the Internet (e-zaba), through existing forms of Zagrebacka banka accounts by checking the ''Instant payment/placanje'' option. Filling out Instant Payment orders is exactly the same as it is with standard orders, and the payer can immediately see if their payment has been successfully completed.

Let's say that a client needs to pay some money on Friday night to a person who has a transaction account with another bank. Until now, it would be necessary to wait until Monday to process such a payment. But with the introduction of this service, the money will be made available in the recipient's account immediately.

Payments are made through NKSInst, a national clearing system for instant payments developed by the Financial Agency (Fina) and approved by the Croatian National Bank.

Instant payments are possible between Zagrebacka banka and other banks included in the NKSInst system. The same applies to instant payments from other banks in the NKSInst system that are made to transaction accounts of Zagrebacka banka clients. Clients will be informed when preparing an order and choosing an instant option if the recipient's bank is not included in the NKSInst system, and they can check the list of all involved banks on Fina's website.

For more on Croatian banks, loans and services, make sure to check out our dedicated lifestyle section.

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