Banks in Croatia see 44% drop in gross profit in first nine months

ZAGREB, Dec 1 (Hina) – In the first nine months of 2020 banks in Croatia earned a pre-tax profit of HRK 2.96 billion, which is a 44.2% drop from the same period of 2019, show the latest data released by the Croatian National Bank (HNB).

“Despite the decline, the banking system is still stable. Credit institutions in Croatia are well capitalised and the total capital ratio has grown from 24.80% at the end of 2019 to 24.9% at the end of September this year,” the central bank said.

The HNB’s data for the first nine months of this year show that the gross profit of credit institutions totalled HRK 2.96 billion, a drop of 2.4 billion compared to the same period of last year.

“The drop in profit was mostly due to an increase in impairment charges as a result of credit risk (442.7%) because credit institutions have started valuating the increased credit risk due to the COVID-19 pandemic. A marked drop in net revenue of 8.4% is due to a drop in almost all operating revenue. The indicators of credit institutions’ profitability – return on assets and return on equity – were 0.8% and 5.5% respectively,” the central bank’s analysts have said.

Most banks operated at a profit, four at a loss

The HNB data, which is based on data submitted to the central bank, shows that of 20 banks operating in Croatia 16 operated at a gross profit while four operated at a loss in the first nine months.

As usual, Zagrebacka Banka was first, with a pre-tax profit of close to HRK 1.1 billion, which is HRK 446.5 million or 30.2% less than in the first nine months of 2019.

Privredna Banka Zagreb (PBZ) follows with a gross profit of HRK 735.4 million, which is 658.2 million or 47.2% less year on year.

OTP Bank is third, with a gross profit of HRK 336.4 million, which is close to 47% or HRK 297.9 million less.

The three banks are followed by Erste&Steiermaerkische Bank, with a profit of HRK 273.8 million, a drop of 68.9% or HRK 484.5 million, the state-owned Croatian Postal Bank, with a profit of HRK 199 million, a drop of 2.1 million or 1.1%, Addiko Bank, with a pre-tax profit of HRK 147.3 million and Raiffeisenbank Austria, with a pre-tax profit of HRK 102.3 million.

The four banks that operated at a loss are Imex Bank, J&T Bank, Slatinska Bank and Samoborska Bank.

Banks’ assets up 4.6%

The assets of all credit institutions at the end of September amounted to HRK 451.1 billion, which is HRK 20 billion or 4.6% more than at the end of 2019.