21 February, 2022 - Zagrebacka Banka (Zaba) generated a profit after tax of HRK 2.01 billion in 2021, up HRK 1.27 billion or 173.2 percent compared to 2020, according to the bank's financial statement released on Monday.

At the same time, the bank's operating income amounted to HRK 4.41 billion, which is an increase of HRK 792 million or 21.9% on the year.

Furthermore, the bank's unconsolidated and unaudited financial report notes that operating expenses amounted to HRK 1.57 billion, down HRK 17 million on the year, with cost-to-income ratio amounting to 35.7%.

Deposits by clients, which constitute a primary source of financing, amounted to HRK 107.23 billion, which is an increase of HRK 8.9 billion, while deposits by credit institutions amounted to HRK 2.6 billion, down by HRK 3.13 billion, mostly due to a decrease in within-group financing and deposits by other banks.

Zaba group posts net profit of almost HRK 1.5 billion

According to the group's consolidated unaudited financial statement, the Zagrebačka Banka Group generated a net profit of almost HRK 1.5 billion, up by HRK 495 million or 49.3% from 2020.

The group's operating income amounted to HRK 4.7 billion, up HRK 87 million or 1.8% year on year, while operating expenses amounted to HRK 2.2 billion, about the same as in 2020.

Results still impacted by disruptions caused by pandemic

The bank said that the bank's results were still influenced by disruptions caused by the COVID-19 pandemic.

However, the decrease in operating income was compensated for with lower expenses of value adjustments on loans as a consequence of economic recovery in 2021, the bank said in its financial statement.

ZAGREB, April 15, 2020 - President Zoran Milanović on Wednesday called on banks to offer, under clearly defined criteria, an interest-free loan repayment moratorium of 12 months to workers, the self-employed, and small and micro businesses affected by the crisis caused by the coronavirus pandemic.

"Since in normal circumstances those categories of debtors meet their obligations towards banks in the most regular manner and since the Croatian National Bank has relaxed supervision of the banking sector, this move would show that banks are actively participating in the process of maintaining economic activity," Milanović said in a Facebook post.

He notes that what banks are currently offering is an ordinary moratorium appropriate to a normal situation, which is not helping debtors.

"The moratorium currently on offer, which is not interest-free, is no relief for debtors, it will eventually increase their total loan liabilities and on top of everything, debtors have to pay for contract authentication," he says.

In future banks will be able, owing to measures taken to encourage economic activity and loan growth, to offset possible losses to be incurred due to participation in the process aimed at preserving economic activity, he says.

"In that spirit, I call on banks to adjust their moratorium offers to the current situation," Milanović says in his post.

More coronavirus news can be found in the Lifestyle section.

ZAGREB, March 31, 2020 - The Croatian National Bank (HNB) once again intervened on the foreign exchange market on Tuesday with the aim of maintaining exchange rate stability by selling banks just over €618 million, whereby HRK 4.7 billion was withdrawn from the system.

The HNB sold €618.5 million at the middle exchange rate of HRK 7.608529.

This is the fifth intervention and so far, the largest by the central bank in an effort to maintain exchange rate stability and ease the pressure of the depreciation of the domestic currency, the kuna.

HNB first intervened on the exchange market on March 9 followed by further interventions during the month, selling a total amount of €1.63 billion to commercial banks. With today's intervention that amount has been increased to almost €2.25 billion.

Today, on the last day of March, the €/HRK middle exchange rate was 7.609231, which is just over 2% more than it was at the start of March when it was 7.456909.

More news about banks can be found in the Business section.

ZAGREB, March 25, 2020 - The Croatian National Bank (HNB) stated on Wednesday that all commercial banks in the country had temporarily suspended fees charged for ATM transactions by natural persons at any machine regardless of whether it is their bank or not.

All the banks in Croatia have accepted the recommendation by the HNB to temporarily waive fees charged for ATM transactions by natural persons at ATMs outside their own bank’s ATM network as one of the measures envisaged to minimise movements and social interaction during the outbreak of the COVID-19 infection.

In an effort to minimize the spread of coronavirus infection, the national bank issued "a recommendation to credit institutions to issue debit cards to the most vulnerable consumers and to ensure separate working hours for retirees," the HNB also reported.

Also "banks have been asked to consider the possibility of issuing debit cards to the most vulnerable groups of consumers. This primarily refers to the elderly who do not hold debit cards linked to accounts and to consumers who, due to blocked accounts, opened protected accounts for which some banks do not normally issue debit cards. The use of debit cards would enable these people to access cash and information about their account balance via the ATM network. Banks have also been invited to consider the option of enabling access to branch offices with minimum risk to the health of particular groups of the population (e. g. separate working hours for retirees)," the HNB stated on its website.

Furthermore, the HNB has already advised banks to retain their net profits from 2019, as one of the measures to respond to the disruptions in the market caused by the coronavirus pandemic outbreak.

According to the Croatian Banking Association (HUB), the net profit of banks in Croatia in 2019 amounted to HRK 5.81 billion on the aggregate.

More coronavirus news can be found in the Lifestyle section.

ZAGREB, January 23, 2020 - Michael Mueller, the president of the management board of the Raiffeisen Bank (RBA), resigned on Wednesday in the wake of the negative perception in public regarding a tender to procure the services of a PR agency, the bank has reported.

I am aware of the strong negative perception generated of Raiffeisen Bank and its management and I stress that the said document in no way reflects the intention of the bank's management. I have decided to resign in order to protect the bank's reputation, Mueller said.

The press release notes that Andreas Gschwenter is Chief Operating & Information Officer at Raiffeisen Bank International AG and Chairman of Raiffeisen Bank Zrt has accepted Mueller's resignation.

Following approval by the Croatian National Bank (HNB), Liana Keserić will be acting president of the management board at RBA, the press release notes.

Mueller's resignation comes after it was disclosed the RBA was seeking a PR agency that would exert pressure on the Croatian Constitutional Court over the case of the Swiss franc-pegged loans.

The Index news portal on Sunday reported that RBA was seeking PR agency for crisis communication regarding Swiss franc-denominated loans and that one of its tasks includes "exerting pressure on the Constitutional Court and other courts in Croatia."

RBA explained that it had advertised the tender to engage a PR agency with the aim of the bank's stance being equally represented in the case CHF-pegged loans.

"The task of the agency was solely intended as a way to make the other side of the case gain more publicity, since it has not had much of a reach so far. In all activities, including this tender, we have sought legitimate procedures as our solutions, that is, communication activities which would reach their target audience through the media," RBA said.

However, the tender came across negative reactions and the Franak association on Monday reacted sharply to the news of the tender. The SNAGA party and the Franak association on Tuesday asked the Office of the Chief State Prosecutor to investigate an attempt by Raiffeisen Bank (RBA) to hire a PR agency to put pressure on courts in a case in which bank contracts on loans pegged to the Swiss franc were nullified.

The HNB on Monday reported that it was unpleasantly surprised by that commercial lender's advertisement for a PR agency and that it would urgently conduct an inspection of RBA and take the necessary steps.

More news about banks can be found in the Business section.

ZAGREB, January 20, 2020 - The Franak association on Monday reacted sharply to the news of a tender issued by Raiffeisenbank Austria (RBA) for a PR agency which would influence the Constitutional Court in the dispute over the nullification of contracts for Swiss franc-denominated loans, underscoring that any pressure on the judiciary was unlawful.

The Index.hr website posted on Sunday that RBA was looking for a PR agency that would exert pressure on the Constitutional Court. In their tender RBA is looking for a crisis communication service concerning CHF loans. One task includes "exerting pressure on the Constitutional Court and other courts in Croatia."

The Franak association points out that influencing the judiciary is unlawful and calls on the State Prosecutor's Office (DORH) to investigate in detail the way in which RBA does business, especially given the timing of their action, and to investigate whether the Constitutional Court or the Supreme Court have been influenced.

The Franak association sees RBA's action as "a sort of an admission that debtors are on an excellent way to proclaim a new victory."

RBA told Hina on Monday that they had advertised the tender for a PR agency with the aim of the views of banks being equally represented in the Swiss franc loans case.

"The task of the agency was solely intended as a way to make the other side of the case gain more publicity, since it has not had much of a reach so far. In all activities, including this tender, we have sought legitimate procedures as our solutions, that is, communication activities which would reach their target audience through the media," the bank says.

RBA points out that all its business operations are in compliance with all Croatian laws and regulations and that they have always been that way.

More news about banks can be found in the Business section.

ZAGREB, January 10, 2020 - In 2020 the Croatian National Bank (HNB) will have additional macro-prudential measures at its disposal and it will impose them on commercial banks to maintain the financial system's stability, and the exchange of data on customers' creditworthiness will be reintroduced, according to some of the draft acts that are to be adopted.

In late 2019, the Finance Ministry put to public consultation a set of draft acts adjusted to the European acquis within the context of steps which should be taken on Croatia's journey towards the euro area. The public consultation lasted until this week.

One of the steps is a letter which Croatia sent in 2019 considering its admission to the Exchange Rate Mechanism (ERM II).

The letter of intent expresses Croatia's intention to enter the exchange rate mechanism and to implement 19 measures in six areas in the next 12 months on the path towards the introduction of the euro as the official currency.

In this regard, Croatia is set to amend the legislation on credit institutions to enable the exchange of data on customers regarding the assessment of their creditworthiness.

Some 15 years ago a score of commercial lenders operating in Croatia set up a register of credit obligations of customers (HROK) enabling those lenders to exchange information on credits taken by customers.

However, the General Data Protection Regulation (GDRP), introduced by the European Union in mid-2018, eliminated this register.

The latest amendments provide for legal security in the exchange of information between banks for the purpose of assessing their customers' creditworthiness.

Also, one of the novelties is that it will be the HNB and not the Croatian Banking Association that will calculate the national reference rate of the average cost for financing the banking system. The abbreviation in Croatian for this rate is NRS.

The outcome of a comprehensive stress test for five leading Croatian banks, conducted by the European Central Bank (ECB), will be announced in May.

The set of amended laws will enable the Croatian central bank to impose measures if they turn out to be necessary in accordance with the stress tests' outcome.

More economy news can be found in the Business section.

ZAGREB, December 31, 2019 - The Croatian National Bank (HNB) on Tuesday released an updated list of systemically important financial institutions (SIFI) which continued to include seven commercial banks.

The seven banks are Zagrebačka Banka (ZABA), Privredna Banka Zagreb (PBZ), Erste&Steiermaerkische Bank (Erste), Raiffeisenbank Austria (RBA), OTP Banka Hrvatska, Addiko Bank and Hrvatska Poštanska Banka (HPB).

In 2016, the HNB started applying the criterion of the capital conservation buffer (CCoB), which is a certain percentage of a bank’s total exposures that needs to be met and its objective is to conserve a bank’s capital. When a bank breaches the buffer, automatic safeguards apply to limit the amount of dividend and bonus payments it can make.

The central bank applies a 2% rate of CCoB to five commercial lenders: ZABA, PBZ, Erste, RBA and OTP, while Addiko is subject to a CCoB rate of 1% and HPB is subject to 0.5%.

The 2% rate applied to the five banks remained the same as at the start of the year, whereas Addiko's rate was reduced by one percentage point in comparison to the start of 2019 and HPB's rate went up from 0.2% to 0.5%.

More news about banks can be found in the Business section.

ZAGREB, December 8, 2019 - Negative interest rates are appearing in some European money and sovereign bond markets but not on Croatian bonds, the Croatian Banking Association (HUB) says in its latest analysis, noting that the necessary prerequisites must be created for negative interest on loans and that in Croatia's case, this is not realistic for now.

The HUB cites Eurostat data on ten-year sovereign bond yields in local currencies. The governments with negative yields in September were Denmark (-0.59%), Germany (-0.59%), Ireland (-0.01%), France (-0.28%), Latvia (-0.11%), Luxembourg (-0.50%), the Netherlands (-0.43%), Austria (-0.30%), Slovenia (-0.16%), Slovakia (-0.34%), Finland (-0.30%) and Sweden (-0.23%).

Negative interest rates are an obvious reality, but it must be noted that the prerequisite for them is that the country should be a member of the euro area or very closely tied to it and developed, like Denmark and Sweden, HUB says in its "Are negative interest rates a reality?" review.

Croatia's ten-year sovereign bond yield was 0.49%. For now, it is far from the minus zone, HUB says.

However, HUB notes, when interest rates on long term sovereign bonds end up in the negative zone, it is very likely that interest rates on loans will stay positive because of the deposit-to-loan conversion costs.

Average interest rates on long term corporate loans in Sweden (1.22%) and Belgium (1.43%) are the lowest in the EU. Interest on housing loans in September was lowest in Slovakia (1.04%) and Germany (1.24%).

Although Croatia has not introduced the euro yet and is not a developed EU member state, average interest rates on corporate and housing loans are within the euro area's interval, as if it had introduced the euro, HUB says.

For the first time, the average interest on housing loans in Croatia dropped below 3% (2.8%).

More economy news can be found in the Business section.

ZAGREB, October 4, 2019 - MP Goran Aleksić of the SNAGA party said on Friday he had filed a criminal complaint against seven banks that were convicted in a class action lawsuit relating to Swiss franc-denominated loans, accusing them of a joint criminal enterprise against the citizens of Croatia.

Aleksić filed the complaint with the State Prosecutor's Office (DORH) against Erste & Steiermaerkische Bank, Zagrebačka Banka, Privredna Banka Zagreb, Addiko Bank, Raiffeisenbank Austria, OTP Bank and Splitska Banka which is now part of it, and Sberbank.

Early in September the Supreme Court found that the banks had breached the collective interests and rights of holders of loans originally indexed to the Swiss franc.

The court dismissed the motion by the banks for a review of the case and ruled that the banks included unfair contractual provisions with a CHF clause and charged unfair interest rates, Aleksić said. He recalled that the annuities paid on the CHF loans were between 50 and 100 percent higher than those originally stipulated in the contracts, causing people traumas, divorces, suicides and evictions.

"Those were usurious loans," Aleksić said, adding that the banks had formed an oligopoly through the Croatian banking association and defrauded Croatian citizens of between 15 billion kuna and 25 billion kuna. He said that for this reason the national GDP had been lower in the last 15 years than it would have been had the citizens retained the money, the state budget was smaller by 3-4 billion kuna, while the banks got richer.

Aleksić said that even though their conduct had been found to be illegal, they had continued to charge unfair interest rates on CHF, euro and kuna-denominated loans until as late as 10 January 2013.

"That is the result of the banks' conspiracy to form an oligopoly, which is against the Competition Act because, without leaving paper trail, they indirectly set terms for consumer loans tied to the interest rate, which was changed by the bank, and to the CHF clause," he said.

Commenting on the arbitration proceedings in Washington initiated by four banks against Croatia over the conversion of CHF loans, he said that the case was in violation of EU law. "The banks are thieves that robbed the Croatian citizens. The conversion only reduced the principal, but the overpaid interest, exchange rate difference and default interest have not been paid back."

Aleksić concluded by saying that he expected DORH to investigate and prosecute the banks that had caused financial damage to the Croatian citizens, the national economy and the state budget. He said that France had taken similar action in 2015.

More news about banks can be found in the Business section.