Banks Profits Down 73% in Croatia
- by croatiaweek
- in Business
2013 was not a great year for banks operating in Croatia, with profits down a massive 73.1%, according to data published by the Croatian National Bank (HNB)..
Profits from the 31 banks operating in Croatia in 2013 was 756.7 million kuna (100 million EUR), 73.1% less than in the previous year when net profits were north of 2.8 billion kuna (360 million EUR).
The news however comes to no surprise to analysts, who have long indicated that the five-year recession, huge unemployment and new regulations would take their toll on the business results of Croatian banks. The recession, they say, has especially hit growth of non-performing loans, which according to central bank data, reached 15.32% of the total loan portfolio at the end of September last year. This means that almost 44.2 billion kuna (6 billion EUR) worth of loans, or nearly one in six which are approved by the banks, have entered into the category of ‘almost or completely irrecoverable’. In these cases banks have no other choice but to seek write-offs.
Out of the operating 31 banks, 11 banks were in the red in the first half of 2013 – to a combined tune of over 200 million kuna (25 million EUR). Those who struggled the most in 2013 have been Centar banka, Splitska banka, VABA and Karlovacka banka.
Zagrebacka banka and Privredna banka recorded the highest profits in the first half of the year, followed by Erste banka, Raiffeisenbank and Hypo banka.