Tuesday, 12 January 2021

Croatian OTP Banka Lowering Interest Rates From February 1st

January the 12th, 2021 - Excellent news for those with accounts with the Croatian OTP banka as interest rates are set to be frozen as of the beginning of next month.

As Poslovni Dnevnik writes, on Monday, the Croatian OTP banka announced that it would lower its interest rates on loans to Croatia’s residents who have accounts in euros and kuna linked to the National Reference Interest Rate (NRS1) from the beginning of February.

From February the 1st, OTP banka will lower interest rates on all loans to those with a variable interest rate, which is related to the movement of the national reference rate (NRS1), so the interest rate on loans with a currency clause in euros will be lower by 0.05 percent points while on loans in kuna will be lower by 0.06 percentage points, the statement said.

As was added, this interest rate reduction refers to all existing and newly approved loans that are related to the National Reference Rate (NRS1).

OTP banka notes that it will inform all its clients in a timely and written manner about the change in the interest rates and the new amount of annuities and the new repayment plan.

The national reference interest rate is the average cost of financing the banking sector and is calculated by the Croatian National Bank (CNB). NRS1 represents the costs of financing from the funds collected from deposits of natural persons, and NRS2 the costs of financing from the funds collected from deposits of natural and legal persons of the non-financial sector.

Back at the end of November, the CNB published the values ​​of the national reference rate (NRS) for the third quarter of 2020, which show the continuation of the downward trend that has been going on since way back at the beginning of 2013. Of the 24 NRS indices calculated by the CNB, in the third quarter of 2020 all these indices showed lower values ​​than they did in the previous quarter, although their decline was slightly smaller than in the previous quarter, with the exception of the Swiss currency index, which remained unchanged.

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Friday, 9 October 2020

OTP Banka Strengthens Status of Leading Croatian Custodian Bank

October the 8th, 2020 - OTP banka has won the title of the best Croatian custodian bank once again, earning an enviably high rating from satisfied clients and no doubt boosting the bank's already high level of respect.

When it comes to banks in Croatia, there are many options. For those who don't want a Croatian bank account for whatever reason now also have the option of companies like Revolut and Transferwise as opposed to having to use foreign accounts which incur additional charges for use abroad. OTP banka, however, has consistently earned high ratings among both regular clients and business ones alike.

As Novac/Jozo Vrdoljak writes on the or the fifth year in a row, the well respected Global Investor / ISF magazine has proclaimed the already popular OTP banka d.d. the best Croatian custodian bank in the category of unweighted ratings according to the opinions of clients, who gave it an extremely high rating of 6.73.

It was necessary for this Croatian custodian bank to meet more than ten demanding criteria, including the provision of settlement services and corporate actions, the quality of reporting on market events, including regulatory changes, and the quality of business relationships, which is one of the most important but also the most difficult points of service for banks to meet.

The Republic of Croatia's OTP banka thus won the highest unweighted ratings as judged by the size of its clients' assets.

"This high rating confirms that clients, despite these challenging times, still consider OTP banka to be one of the best providers of care and protection for clients' assets," read a statement from the aformentioned winning Croatian custodian bank, OTP banka.

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Monday, 15 April 2019

Croatia's Woes Leave it Second Only to Bulgaria in Underdevelopment

The problem of emigration in Croatia has been further underlined by weak economic indicators, after Bulgaria, Croatia is the most underdeveloped country in the EU, explains economist Zdeslav Šantić.

As Tomislav Pili/Poslovni Dnevnik writes on the 14th of April, 2019, bringing Croatian average salaries closer to the average salaries of Western Europe, and strengthening institutions, are major factors which could significantly reduce the outflow of people from Croatia to work overseas, according to a study by the Brussels think tank, Centre for Economic and Political Studies (CEPS), which was published last week.

In a piece of research entitled "Mobile Workers of the European Union: A Challenge for Public Finance?" authors Cinzia Alcidi and Daniel Gros discuss current trends in labour mobility within the European Union, and the challenges faced by the countries from which such a workforce leaves.

The research suggests that in the last ten years, the mobility of workers has increased considerably in the EU. While in 2007 only 2.5 percent of workers had left their home countries, in 2017, the share of the mobile working population of the European Union grew to 3.8 percent. Increasing the mobility of European workers is the result of two factors, states CEPS. The first is the enlargement of the EU to the east having occurred in two waves, and mobility has increased much more, especially after the accession of Romania and Bulgaria to the EU back in 2007. Apart from the east-west direction, recent years have seen more labour force mobility from the southern EU member states to the north, due to debt crisis and unemployment growth.

The latest data referenced by CEPS shows that Romania, Lithuania and Croatia have the highest share of workforce abroad, far above the European average. Nearly 20 percent of Romanian citizens earn their money in other EU member states, in Lithuania it is 14.8 percent, and in Croatia, 13.9 percent. For Croatian economists, such data doesn't really come as a surprise.

"Increasing emigration over the last few years was expected, and the experience of other new EU member states has shown that after EU accession and the labour market opening, emigration strongly increased, and in Croatia, the problem of emigration is further underlined by weak [domestic] economic indicators.

Croatia had one of the longest recessions in Europe, lasting six years in total. At the same time, even after recovery began, the growth dynamics remained insufficient in bringing Croatia closer to the EU's economic growth. Today, Croatia, after Bulgaria, is the least developed country,'' says OTP banka's economist Zdeslav Šantić.

"The accelerated outflow of the working-age population is particularly evident with the opening up of [Croatia's access to] the single European market since 2013, which was further strengthened by the deep recession in Croatia. However, with the exit from the migrant crisis, emigration from Croatia, especially among the working-age population, has not diminished but accelerated. Migration motives can be different - from differences in incomes, to employment opportunities, to structural factors,'' emphasised Zrinka Živković Matijević, an analyst from RBA.

"The very last factors - a weak institutional environment and (unfavourable) expectations of future economic prosperity (quality of education, satisfaction and trust in politics, future opportunities for generations to come) - are the most common motives for migration of citizens of a particular state who have a higher level of education. In that context, it isn't surprising that the countries which the most emigration are those with the lowest social progress index.

Regarding the convergence of wages, the fact is that at the very beginning of the transition process, Croatia had a high exchange rate, ie, a higher level of wage adjustment with the EU compared to other new members, following only Slovenia, the RBA analyst said.

"Meanwhile, the pace of wage growth and the standard of measured purchasing power parity in other countries has increased considerably since 2004, while GDP measured by the purchasing power parity in relation to the EU 28 average remains at approximately the same level (around 60 percent of the EU average), stagnant or comparatively behind,'' explained Živković Matijević.

Unfortunately, in Croatia, the problem of emigration is not a consequence of current economic trends, Šantić added, saying that the high perception of corruption and nepotism, inefficient state institutions, the huge importance the state carries in overall economic trends and the lack of transparency in the public sector further encourage young people to leave.

"When talking about the emigration of young people, it's worth mentioning that there's a lack of a housing care strategy. There's no regulated rental market yet, but young people have only the option of buying property through multi-year borrowing, and government measures are aimed solely at boosting property purchases,''

An interesting detail in the CEPS survey is the share of faculty-educated mobile workers. Although the usual theory often claims that those who find it the "easiest to leave'' are the highly educated, research shows that this is not the case, especially in the case of new EU members such as Croatia.

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Click here for the original article by Tomislav Pili for Poslovni Dnevnik