ZAGREB, 29 May 2022 - As many as 86% of members of Generation Z in Croatia would rather go to a bank to conclude a contract on a loan than resort to the Internet banking for that purpose, it was said at a recent Digital Touchpoint conference in Zagreb.

During the conference, organised by the ASEE and Payten companies, the findings of a survey conducted by the Ipsos pollster among 300 respondents were presented. Surprisingly, youngsters, who are growing up with the Internet, prefer going to a bank to conclude a contract on a loan.

Generation Z (or Gen Z for short), colloquially also known as zoomers, is the demographic cohort succeeding Millennials and preceding Generation Alpha. Researchers and popular media use the mid to late 1990s as starting birth years and the 2010s as ending birth years. 

As much as 63% of those respondents also prefer shopping in-store than online.

Furthermore, 80% of respondents consider possession of one's own property important.

A majority of those polled know what crypto currencies are but they do not use them.

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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.

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ZAGREB, 9 March 2022 - Croatia's banking system is stable, highly-capitalized and liquid, and the country's integration in the Exchange Rate Mechanism (ERM II) and efforts to adopt the euro have additional boosted those features, the Croatian Banking Association (HUB) said on Wednesday.

The association underscores that the capital adequacy ratio of all the Croatian banks reached 25.6% at the end of 2021, "making the Croatian banking system one of the best capitalised banking systems in the world and one of the most developed in southeast Europe, which is why the system is fully prepared for the coming challenging period."

Credit institutions in Croatia operated at a profit of HRK 5.6 billion (€750 million) in 2021, which is an increase of 108.8% on the previous year, the Croatian National Bank (HNB) said recently. At the end of last year, 20 banks operated in Croatia, employing 18,200 people.

The HUB's press release reads that the profit of the banks was generated by an increase in trading revenues and due to small-scale depreciation of financial assets, as a direct consequence of the stronger-than-expected recovery from the pandemic recession in 2020.

"Financial stability is a key prerequisite for the sustainable economic growth, and it is extremely important in the crises that we have been faced with  recently," HUB say, pointing otu the example the rapid reaction in the case of resolution of Sberbank Croatia.

HUB also notes that the banking system is making intensive preparations for the changeover from the kuna to the euro.

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March the 8th, 2021 - The Croatian banking system has had a lot on its already full plate trying to balance out the economic and financial situation caused by the ongoing coronavirus pandemic. As the situation unfolds and remains difficult to predict, it seems that the true extent of the damage done won´t be known for a few months yet.

As Poslovni Dnevnik/Ana Blaskovic writes, the first year of the pandemic for the Croatian banking system saw profit more than halved down to 2.7 billion kuna, and the decline in total income exceeded the correction of the country´s GDP. While the domestic economy as a whole sank by a deeply concerning 8.4 percent, bank inflows plunged one and a half percentage points deeper.

Operating results exceeded 7.3 billion kuna, which means that more than 4 billion kuna was frozen through various value adjustments and provisions. The director of the Croatian Banking Association, Zdenko Adrovic, went on to discuss this further.

In 2021, the growth of lending to companies and individuals is expected to accelerate in line with recovery announcements. Will moratoriums actually be enough? Moratoriums and other measures to help clients peaked at the end of August, when their value rose to almost 40 billion kuna, of which 60 percent went to companies.

"It´s the lion's share of liquidity that has remained with companies and the population through these moratoriums, which have helped keep the steep decline in GDP at these levels," Adrovic explained, noting that these currently paused repayments stand at around 32.5 billion kuna in total. Will that be enough for businesses and citizens?

Adrovic noted that according to the rules of the European Banking Authority (EBA), the length of such a moratorium is limited to 9 months and that they must end by the end of this year.

"More than 80 percent of clients whose moratorium has expired so far have continued to pay their obligations properly. If things return to normal, tourism will kick off again and then that should be enough," he said.

Last year, the Croatian banking system will remember three key characteristic trends of the coronavirus crisis - monetary expansion and government wage subsidies combined with the restraint (and inability) to spend in the private sector, all of which spilled over into strong growth in deposits that have been on an upward trajectory for the past five years.

At the end of December, citizens' savings rose by 6 percent, accelerated to 7 percent in January. Banks currently have around 226.3 billion kuna, as much as 14.6 billion kuna more than before the coronavirus pandemic struck. Interest rates remained low or slightly reduced, and the margin is stable at around 2.6 percentage points.

The average price of housing loans with a maturity of over 10 years is 2.9 percent, more expensive than in neighbouring Slovenia where citizens pay 2.28 percent and cheaper than the Czech Republic, where things stand at 3.52 percent. Finally, loans continued to grow despite the ongoing crisis. Companies were accumulating liquidity when facing an uncertain future, and a proverbial hole of over 30 billion kuna opened up for the state overnight.

Total retail loans rose by 2.3 percent, and although they pulled the brake on cash loans, housing recorded double-digit growth in the last quarter due to APN subsidies and post-earthquake remediation.

The Croatian Banking Association has pointed out that a comparison of credit growth rates in European Union member states shows that "Croatian banks are in the upper half of the distribution of credit growth rates to households and companies by country, and interest rates have remained low, as if Croatia has already adopted the euro."

In the first edition of Croatian Banking Association Review for 2021, in which esteemed Croatian economist Velimir Sonje analyses business over the last year, it is pointed out that with a drop in net profit of 53 percent, net interest income was lower by 5.7 percent, and net income from fees and commissions by 10.5 percent.

Although they cut costs, this adjustment was slower, so the net result before provisions was almost 19 percent lower. The dynamics spilled over into efficiency as measured by the cost-to-income ratio, which, after a long time of approaching 40 percent, sat firmly above the 50 percent threshold.

With a capitalisation of close to 25 percent, the Croatian banking system remains stable, they have already reserved significant amounts, but we will only have a true picture of bad loans and the impact of the ongoing coronavirus crisis at the end of June, according to the aforementioned Association.

Then, the EBA's coronavirus rule is set to expire, according to which moratoriums will not count as bad loans as they would otherwise.

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A brand new and far more efficient way of banking is almost ready for its release onto the market in Croatia, thanks to a partnership between Croatian Telecom (HT) and Zagrebačka banka.

As Poslovni Dnevnik/Bernard Ivezic writes on the 6th of June, 2019, with less than twenty days to go until the summer calendar officially begins, the first local mobile bank in the Republic of Croatia, developed by Croatian telecom (Hrvatski telekom) and Zagrebačka banka, is now ready for testing.

This service, called Telekom Banking, comes directly from the largest telecom and largest bank in Croatia, and the announcement is that it will be set up and ready online during the summer. Goran Lončarić, head of Telekom Banking at Croatian Telecom, confirmed that the mobile bank is now ready to be tested out.

"We're now launching the Telekom Banking pilot for friends and family, who will be the first to use the most advanced digital bank in Croatia," said Lončarić.

He also published a photo of his card featuring HT's (T), Zagrebačka banka's and Maestro's logos. Apparently, Deutsche Telekom has already reserved the domain telekombankarstvo.hr where the service will be officially launched.

HT and Zagrebačka banka have both confirmed that the service is ready for public launch and that they're still working on testing mobile applications.

"Users are currently participating in the pilot project and we can say that we're very happy with their first reactions, and those services will become available during the summer," they stated from HT, adding that the application (app) will bring with it a whole host of other innovations.

HT's and Zagrebačka banka's partnership in Croatia is very similar to the one that the Romanian operator and a member of the DT group, Telekom Romania, realised on this market alongside one of the ten largest banks in Poland, Alior Bank. Their service can be found on the telekombanking.ro website and includes access to mobile and web banking by Poland's Alior Bank.

It's a very complex yet simple product, which includes current, savings and foreign currency accounts, as well as cards. For users who receive 1,000 kuna per month, it's all free.

It includes free and unlimited cash withdrawals from any ATM in the entire world, it includes both mobile and web banking, as well as the ability to view your last three transactions without having to go through the log in process.

The system also offers its users absolutely full control over PIN and locking their cards, and it supports both NFC and QR payments, as well as direct payments via email and mobile phone numbers. Lending possibilities are also on offer.

It is not yet known whether or not the exact same service which is offered by Telekom Romania and Alior bank will be offered here in Croatia by HT and Zagrebačka banka.

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