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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March the 8th, 2021 - The epidemiological picture in Croatia went from terrible to very favourable indeed in a short time of just a few weeks, but with the arrival of new variants of the novel virus, things could go sour yet. The Rijeka coronavirus infection rate has unfortunately started to climb once again as new, sometimes more infectious variants circulate.

As Index writes, the chief epidemiologist of the Primorje-Gorski Kotar County Public Health Institute told Dnevnik HTV that the increase in the number of patients in the wider Rijeka area and indeed in that county is clearly being influenced by the spread of new variants of the novel virus.

"The new variants of the virus have a higher disease transmission potential than the standard strain does. Another reason is that we went into certain concessions when it comes to our anti-epidemic measures that led people to believe that they could relax. They used less protection like maintaining social distancing, wearing masks and avoiding gatherings. We witnessed gatherings that were even publicly visible, especially among young people, but also during other various events," said Roncevic when referencing the Rijeka coronavirus infection rate´s unfortunate increase.

He stressed that vaccination against the novel coronavirus, SARS-CoV-2, will continue and they are now preparing for a situation in which there will be significantly more vaccines at hand so that more people will be able to be vaccinated in a short time.

“We will probably continue to use Zamet Hall on Saturdays,” Roncevic quickly added.

In Primorje-Gorski Kotar County, the number of new cases has been increasing in recent weeks, including in the more concerning setting of the Rijeka Clinical Hospital, where far more vulnerable individuals who are already in need of medical care are situated. The epidemiological situation in that county, when compared to previous months, was marked by a higher number of infected children among those attending school, as well as among young people.

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ZAGREB, 7 March, 2021 - Over the past 24 hours, 394 people in Croatia have contracted coronavirus and five have died, the national COVID-19 crisis management team said on Sunday.

There are currently 3,743 active cases of the infection, 767 COVID patients are being treated in hospitals, and 74 of them are on ventilators.

Since 25 February 2020, when the first case of the infection was recorded in Croatia, the country has registered 246,514 people infected with coronavirus, 5,590 of whom have died.

A total of 237,181 people have recovered, 416 of whom over the past 24 hours.

There are currently 14,798 people in self-isolation.

To date, 1,385,768 people have been tested, 6,053 of them in the last 24 hours.

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March the 7th, 2021 - When it comes to the controversial issue of Covid passports, first discussed at any serious level by Greece in its active attempts to see tourism return to its shores, there hasn´t been much said by Croatia. In fact, Croatia Covid passport support will only happen in one situation.

As Poslovni Dnevnik writes, Croatia Covid passport support at the EU level will only exist if such a travel document is not mandatory, Jutarnji list wrote on Sunday, citing an anonymous, well-informed source who said that crossing borders without restrictions should be allowed for those who present a negative coronavirus test result or their vaccination certificate.

After European Commission President Ursula von der Leyen announced this week that they were considering the introduction of a "Digital Green Certificate" for easier border crossings, it became clear that a common solution was being sought at the European Union level to restart passenger traffic between countries. The Commission's final proposal on what the certificate should look like and how passengers will use it should be completed by March the 17th, but the story so far is accompanied by a series of ambiguities and even a fundamental misunderstanding of what the certificate should represent.

According to Politico, which received access to Ursula von der Leyen's letter on the certificate, the European Commission advocates that the certificate not only be proof that passengers have been vaccinated, but also that it combines negative PCR test results in one place, as well as confirmation that the passenger is immune to the virus following their contraction of it and their subsequent recovery from it.

For the introduction of the official certificate, at least according to Politico, mainly tourism dependent countries are in full favour of the document. Spain, Malta, Cyprus and Greece, as well as Cyprus, have all already announced that they plan to start allowing vaccinated Britons into the country without the need for any restrictions, while Cyprus and Greece have come to a very similar agreement reached with Israel, which has done excellently in terms of vaccination of the general population.

However, some other countries are also inclined to introduce this document, and this initiative was welcomed last week by Austrian Chancellor Sebastian Kurz, while Croatia, although dependent on tourism, has so far only very shyly responded to this burning topic.

As Jutarnji list has learned from a well-informed source, Croatian politics generally supports all efforts that will result in easier border crossings, but only if it will not be discriminatory towards citizens.

Although it is unclear what the certificate itself should look like, it is currently being discussed that it will actually be in the form of an app on a smartphone in which the traveller will have their negative test results, their certificate of vaccination or proof of having recovered from the novel disease.

In that sense, Croatia Covid passport support would only occur if it would not be made obligatory for passengers, ie if those who do not have a certificate, but can present their negative test result or their vaccination certificate in some other form would also be allowed to cross borders without facing restrictions, reports Jutarnji list.

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March the 7th, 2021 - The ongoing coronavirus crisis is difficult to manage even for banks as Croatian companies require moratoriums on loans and credit taken out. As the tourist season approaches, Zdenko Adrovic, the director of the Croatian Banking Association, says that banks are quietly hoping that such extensions will become a thing of the past.

As Novac/Marina Klepo writes, with the beginning of the tourist season, when Croatian companies working in the field of tourism and transport start generating income, the Croatian Banking Association believes that their creditworthiness will increase and that there will be no additional need for moratoriums.

Referring to the latest guidelines of the EBA, the EU banking regulatory body, on extending the moratorium to nine months, Zdenko Adrovic, the director of the Croatian Banking Association, stated that an expiration to that will take place on March the 31st this year, which means that the moratorium may last until the end of 2021.

¨I believe that this should be long enough, provided that everything starts to return to normal in the next few months,¨ said Zdenko Adrovic during a presentation. However, he added that he will have a much better picture of the state of Croatian companies and what happened in regard to the economy at the end of June. Whether the moratorium will be extended, obviously, will depend on further instructions from the EBA, but what is quite likely is that the share of so-called bad loans/credit will continue to grow, as well as banks' provisions for value adjustments.

The importance of support

The year of the coronavirus crisis in regard to the banking system, according to Zdenko Adrovic of the Croatian Banking Association, will be remembered for three characteristic trends: the growth of deposits, stable interest rates and the growth of loans. Back in January this year, household deposits were seven percent higher than they were in the same month last year, and compared to the end of 2019, they increased by as much as 15.6 billion kuna.

Profit and capitalisation

As expected, the public health crisis led to a deterioration in overall bank performance, with their profits more than halved last year (down 53.3 percent). Their net interest income decreased by 5.7 percent, and income from fees and commissions down by 10.5 percent. Banks responded to the decline in income with better cost management, but "costs are more rigid than income and cannot be reduced at the same pace." Despite this, Croatian banks remain "among the best capitalised banks in the world". The total capital ratio of 24.9 percent and the entry into the banking union in parallel with the entry into ERM II "guarantees stability, transition through the crisis and the readiness of banks to respond to the increased demand expected by offering new loans in the period ahead as we exit this crisis.¨

March the 7th, 2021 - The number of Croatian private rental owners has seen a decrease as a result of the ongoing coronavirus pandemic and the stringent leisure travel restrictions that have come with it. Their Association is seeking measures to ease things for those in this business.

As Novac/Jozo Vrdoljak writes, in Split-Dalmatia County, the number of Croatian private rental owners decreased by as much as 11 percent, and in the City of Split itself, by almost 15 percent. This information was presented at the online session of the Family Tourism Association Section of the Croatian Chamber of Commerce - Split County Chamber.

Gordana Pitesa stated that a safe epidemiological environment is a prerequisite for the arrival of guests from abroad, and as such she recommended the Safe Stay in Croatia label to all stakeholders in tourism, which can be absolutely crucial for guests when choosing a place to stay.

At the moment, there are only a small number of reservations, said Pitsa, recommending that Croatian private rental owners place more emphasis on making sales and being more present on social media.

"A lot of work has been done by the national family tourism board, some of our proposals have been met and the importance of the board is that on the one hand it allows us to communicate with ministries and relevant institutions, and on the other gives Croatian private rental owners the opportunity to propose more measures and things in regard to doing business easier and better for them,¨ said the president of the Family Tourism Association of the Croatian Chamber of Commerce, Martina Nimac Kalcina.

Nimac Kalcina reminded Croatian private rental owners of the proposals of measures to facilitate the business of private landlords that were sent to the relevant ministry at the end of February, such as the exemption from paying the first installment of the annual flat income tax private landlords must pay which due on March the 31st this year, the exemption from paying tourist tax and other such membership fees for the year 2021 for all those who deregister their accommodation capacities, provided that they did not have registered guests, accessing loans and more.

The session also discussed the need to organise additional coronavirus testing points for visitors, the need to speed up testing, the setting of a far more appropriate price for PCR tests for guests and the better facilitiation of the procedure, which they will continue to insist on because such things will govern tourists´ decision making when it comes to where to go and where to stay. The possibility of putting the categorisation process on hold, for example, for one year, was also discussed.

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ZAGREB, 6 March, 2021 - In the last 24 hours, Croatia has conducted 5,838 coronavirus tests, and 658, that is 11.3%, have returned positive, the country's COVID-19 crisis management team reported on Saturday.

In the said period, there have been 15 deaths linked to COVID-19, bringing the death toll to 5,585.

Currently, Croatia has 3,770 active cases, of whom 738 are hospitalised patients, including 72 placed on ventilators.

Since 25 February 2020, when Croatia recorded its first case of infection with coronavirus, 1.38 million persons have been tested and 246,120 have contracted the virus. Of them, 236,765 have recovered, including 482 in the last 24 hours.

There are now 15,312 people self-isolating in the country.

March the 6th, 2021 - The Croatian Institute for Public Health has updated the latest Croatian coronavirus info as the situation with the spread of the novel virus and its accompanying variants continues to unfold.

As Poslovni Dnevnik writes, the Croatian Institute of Public Health has published the revised recommendations on priorities for SARS-CoV-2 testing, contact tracing, the completion of self-isolation, and quarantine/self-isolation with reference to persons who have already had COVID-19 or have been vaccinated against it.

Vaccination against COVID-19 is now considered, as is recovery following the contraction of the disease, to be a valid reason for quarantine exemption and subsequent testing following close contact with a coronavirus patient. Close contact testing continues to be recommended if they are part of a collective arrangement or if they work with highly vulnerable groups of people.

In addition, given the increased testing capacities and the overall reduced incidence of the disease, there is no need to specify priorities for testing in symptomatic individuals, the CNIPH announced in the latest round of updated Croatian coronavirus info.

Contacts infected with the new strain of the novel virus will be quarantined for a period of fourteen days, not ten.

If, based on the anamnesis or the results of a screening test for new variants, it is suspected that the patient is suffering from a variant of the virus with a higher spread potential or that is antigenically different from the predominant variants, contact quarantine will last for fourteen days," the updated Croatian coronavirus info states.

It is also noted that this currently refers to the so-called British, Brazilian and South African variants of the virus. If ongoing sequencing of strains shows that the British variant is already widespread in the population, the extension of quarantine will not apply to close contacts of patients suffering from the British variant.

"After the end of quarantine, it is not necessary to test people if they don´t develop any symptoms (unless they are immunocompromised, work in healthcare facilities or are social service providers for elderly and seriously ill adults, as well as people with disabilities, using a PCR test).

Those who have already contracted and recovered from the disease or have been vaccinated should not be tested if they aren´t presenting with any symptoms.

Immunocompromised people working in healthcare institutions, those who are providers of social services for the elderly and seriously ill adults and persons with disabilities, who did not develop any symptoms of COVID-19 during their quarantine, may return to their workplace and terminate the measure of quarantine after testing negative on the 10th day of quarantine. A PCR test will be used for this purpose.

The latest Croatian coronavirus info also states that people who did develop symptoms of COVID-19 when in quarantine/self-isolation should be tested, and in anticipation of the test results, they should be treated as if they are indeed infected.

A rapid antigen test or a classic PCR test may be used for this purpose.

In addition, if a person has had laboratory-confirmed COVID-19 in the past three months, or if they have received a second dose of the COVID-19 vaccine at least fourteen days previously, testing is not required if there are no clear symptoms of the novel virus, according to Index.

ZAGREB, 5 March, 2021 - Several professional opera singers on Friday launched the "Breathe" campaign to help as of 8 March in the rehabilitation of people who have recovered from COVID-19 but still have difficulty breathing.

The initiative came from Croatian National Theatre (HNK) Zagreb singers Ljubomir Puškarić, Adela Golac Rilović, Ivana Lazar, Ivica Trubić, Tomislav Mužek, Luciano Batinić, Tvrtko Stipić and Ozren Bilušić, and HNK Osijek singers Martina Puškarić and Berislav Puškarić, Ljubomir Puškarić said on Friday, adding that singers from all of Croatia were joining the initiative.

Puškarić said a Facebook group was created for everyone who had experienced serious COVID-19 symptoms and had difficulty breathing even after recovering.

He said those joining the group would obtain information on breathing exercises used by opera singers and be able to work with instructors, all professional operas singers, based on one-on-one online consultations.

To begin with, each participant will get at least one session a week in agreement with an instructor. The therapy is planned to last six weeks. The idea comes from England and a survey has shown that the psychophysical condition of persons working with opera singers has improved.

March 5, 2021 – As of March 7, 2021, four Croatian counties – Istria, Krapina-Zagorje, Požega-Slavonia, and Bjelovar-Bilogora – won't be on the German list of risky areas anymore.

As reported by Romeo Draghicchio, the Croatian National Tourist Board director in Germany, the German Robert Koch Institute of Health removed four Croatian counties from the list of risk areas. Counties that, according to German estimates, are no longer risky are: Istria County, Krapina-Zagorje County, Požega-Slavonia County, and Bjelovar-Bilogora County.

Accordingly, the German Ministry of Foreign Affairs also lifted the negative warning for travel to these counties. This means that when returning to Germany from the mentioned four Croatian counties, a negative PCR test does not have to be presented and no quarantine is required.

The said decision shall enter into force on March 7, 2021.

The news is also listed on the Croatian Interior Ministry's (MUP) website.

"According to the notification from the Robert Koch Institute and the Foreign Affairs Ministry of the Federal Republic of Germany, dated March 7, 2021, the following counties are not on the list of risky areas: Istria, Požega-Slavonia, Bjelovar-Bilogora, and Krapina-Zagorje. A warning has been issued for other counties and the City of Zagreb, asking citizens not to travel if it is not necessary," reads the notice on the MUP's website.

In these four Croatian counties, a small number of people infected with coronavirus were recorded today. Krapina-Zagorje County has seven new infections today, Požega-Slavonia County six, and in Istria and Bjelovar-Bilogora County, only one case of coronavirus infection has been recorded.

The Istria County Civil Protection Headquarters continues to call for caution and responsibility in order to maintain a favorable epidemiological situation in that Croatian county.

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