Banks Maintaining Credit Activity Despite Pandemic, Says Banking Association
ZAGREB, Sept 2, 2020 - In Croatia, banks have retained their credit activity at almost pre-crisis levels, and in late July lending was up 3.8% on the year while moratoriums on loans to legal entities or rescheduling totaled about HRK 29 billion and to citizens HRK 9.3 billion, the Croatian Banking Association said on Wednesday.
"Data on credit activities at the end of July indicate that the outbreak of the pandemic and recession in Croatia has not resulted in a decrease in lending. The total placements of banks amounted to HRK 234.3 billion at the end of July, which is 3.8% more than in July 2019," the Croatian Banking Association (HUB) said in an overview released on Wednesday.
According to the publication, the total amount of loans issued to households at the end of July was about HRK 135 billion, which is 4.1% more on the year and 0.5% more than prior to the outbreak of the Covid-19 crisis at the end of February.
The increase in some types of lending has accelerated, for example, housing loans recorded an increase of as much as 8.8% y-o-y.
"The data indicate that this year due to market activity a significant increase occurred in the share of housing loans in overall loans (from 43.1% to 44.3%), with the share of loans in the kuna currency increasing from 30.5% to 31.3%," HIB says.
HUB notes that at the end of July housing loans amounted to HRK 59.8 billion, with HRK 18.7 billion being kuna loans and 41.1 billion housing loans pegged to a foreign currency. Most of those, in the amount of HRK 40.5 billion, was pegged to the euro.
Commercial loans to enterprises amounted to HRK 85.6 billion at the end of July or 5% more y-o-y and 2.2% more than prior to the outbreak of the pandemic.
HUB notes that new commercial loans issued in the period from March to July amounted to HRK 64.4 billion, which is an increase of 31.2% compared to gross new loans approved in the same period last year.
Citizens did not reach more for short-term loans (overdrafts, credit cards, etc.) and the gross flows of newly approved loans in that period decreased mildly by about one percent.
Enterprises and citizens applied for loan moratoriums, rescheduling
Citing information from the Croatian National Bank (HNB), HUB notes that at the end of July legal entities had applied for a moratorium or rescheduling of loans valued at HRK 29 billion and that HRK 24.8 billion or 85.6% of the total amount applied for was approved based on special (government) measures. This accounted for 29% of the total credit portfolio for non-financial companies.
Citizens applied for moratoriums on loans valued at just under HRK 9.3 billion, with HRK 7.7 billion, or 82.8% of the total amount applied for and 5.7% of the total credit exposure, being approved under government measures, HUB said.
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