ZAGREB, 5 May 2022 - Delivering a ruling on the right to compensation for overpaid interest for loans pegged to a foreign currency after conversion, the EU Court of Justice has found that these loans fall outside the scope of the consumer protection directive.

The court published a decision on Thursday saying that the directive of 5 April 1993 on unfair terms in consumer contracts should be interpreted in such a way that contractual provisions that reflect national law under which the seller or service provider was obliged to propose to the consumer an amendment to their original contract by means of an agreement the content of which was determined by those provisions and which the consumer was able to accept, fall outside the material scope of the directive.

This refers to the case of A.H. vs Zagrebačka Banka regarding the reimbursement of the amount the bank allegedly unduly gained pursuant to the unfair provisions that were initially contained in the loan contract that the parties concluded and were subsequently amended via an annex that contained the amendments foreseen in Croatian law.

Franak: Decision to be made by Supreme Court

The ruling, in this case, has been pending since October 2020 when the Municipal Civil Court in Zagreb applied to the EU Court and independent attorney Juliane Kokott said that the matter did not fall within the jurisdiction of the EU Court.

The Franak association of debtors with loans pegged to foreign currencies said on Thursday that the court did not rule that it was not competent for this case, yet it did not answer the questions asked. That means the decision on the right to compensation of all consumers with converted loans will now be passed on to the Supreme Court, the NGO said.

"We have not been compensated for and the Supreme Court has to adopt the only just decision and that is to determine our rights based on expert evaluation," because without a proper calculation it is not possible to determine whether the balance between the rights and obligations of consumers and banks was achieved by the loan conversion, the NGO concluded.

HUB: EU Court confirms Croatian case is specific

The Croatian Banking Association (HUB) said that the ruling of the Court of Justice of the European Union confirmed HUB's position that the Croatian case of CHF-indexed loans was specific compared to other EU countries because the conversion was carried out in accordance with a law that was binding on banks but voluntary for consumers.

HUB cited the court's finding that Directive 94/13 on unfair terms in consumer contracts is not applicable to contractual provisions that reflect the mandatory provisions of national law or, in the Croatian case, the provisions of conversion agreements concluded in accordance with the provisions of the Act amending the 2015 Consumer Credit Act.

It is assumed that the national legislature has, through its intervention, established a balance between the rights and obligations of the contracting parties and such a decision is in conformity with the case law, HUB said, recalling that 94 per cent of CHF loan holders voluntarily converted their obligations.

HUB noted that under the amended law the banks bore the full cost of the conversion, which totalled HRK 7.5 billion (€1bn), and that the conversion ensured that CHF loan holders had equal status to that of euro loan holders.

"Bearing this in mind, any further compensation of one category of debtors would be discriminatory and would distort the balance established by the law," HUB said..

It also noted that the Croatian Supreme Court has found that conversion agreements concluded pursuant to the amended Consumer Credit Act are valid and have legal effect where the provisions of the basic loan contract concerning the floating interest rate and foreign-currency clause have been found null and void, and that CHF loan holders have the same status as euro loan holders.

HUB said that this position was now additionally confirmed by the EU Court and that the validity of the conversion and its effect on the reimbursement of consumers should no longer be a matter for the courts.

For more, check out our business section.

February the 28th, 2022 - A brand new Zagrebacka banka instant payment service has been introduced for the clients of this Croatian bank, be they business or private customers.

As Poslovni Dnevnik writes, Zagrebacka banka has introduced a new instant payment service for all its private and business users who have transaction accounts with the bank, and the new Zagrebacka banka instant payment service will be able to be used for up to a maximum of 100,000 kuna. Instant payments in Croatia can be made in the Croatian national currency (kuna), and can be carried out every day, including during weekends, over bank holidays and on public holidays.

Clients of Zagrebacka banka will thus be able to execute their transactions in almost real time, meaning in just a few seconds. Instant payments are made by online banking via a mobile application (m-zaba) and the Internet (e-zaba), through existing forms of Zagrebacka bank account, and then by checking the ''instant payment'' option.

Filling out Zagrebacka banka instant payment orders will be exactly the same as it is with standard payment orders, and the payer can immediately see if their payment has been successfully completed and sent to the correct individual.

For example, if a client needs to pay money on Friday night to a person who has a transaction account with another bank, it would have been an issue owing to bank processing times. Until now, it would have been necessary to wait until Monday to see the money appear in the desired bank account.

Now, with the introduction of this new Zagrebacka banka instant payment service, the money heading for the recipient's account will be available immediately. Payments are made through NKSInst, a national clearing system for instant payments developed by the Financial Agency (Fina) and approved by the Croatian National Bank (CNB/HNB).

For more on Croatian banks and their services, make sure to check out our dedicated lifestyle section.

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.

February the 11th, 2022 - The new Zagrebacka banka instant payment offer is likely to delight the popular bank's clients, making life much easier when sending money quickly and easily in amounts up to 100,000 kuna.

As Poslovni Dnevnik writes, the brand new Zagrebacka banka instant payment option has been introduced as a new service intended for all its private and business users who have transaction accounts. They can execute their payments with this new option up to a maximum of 100,000 kuna. Zagrebacka banka instant payment is available here in Croatia and are possible in kuna despite the country's impending Eurozone accession, and can also be carried out every day, including weekends, bank holidays and public holidays.

Clients of Zagrebacka banka will thus be able to execute their transactions in almost real time, meaning in just a few seconds. Zagrebacka banka instant payment transactions are made by online banking via the mobile application (m-zaba) and on the Internet (e-zaba), through existing forms of Zagrebacka banka accounts by checking the ''Instant payment/placanje'' option. Filling out Instant Payment orders is exactly the same as it is with standard orders, and the payer can immediately see if their payment has been successfully completed.

Let's say that a client needs to pay some money on Friday night to a person who has a transaction account with another bank. Until now, it would be necessary to wait until Monday to process such a payment. But with the introduction of this service, the money will be made available in the recipient's account immediately.

Payments are made through NKSInst, a national clearing system for instant payments developed by the Financial Agency (Fina) and approved by the Croatian National Bank.

Instant payments are possible between Zagrebacka banka and other banks included in the NKSInst system. The same applies to instant payments from other banks in the NKSInst system that are made to transaction accounts of Zagrebacka banka clients. Clients will be informed when preparing an order and choosing an instant option if the recipient's bank is not included in the NKSInst system, and they can check the list of all involved banks on Fina's website.

For more on Croatian banks, loans and services, make sure to check out our dedicated lifestyle section.

ZAGREB, 31 Oct, 2021 - Increased uncertainty about future economic trends is leading to an increase in savings, according to an analysis by the Croatian Chamber of Commerce (HGK) on the occasion of World Savings Day, marked on 31 October.

Data from the Croatian National Bank (HNB) show household deposits at the end of September 2021 were HRK 240.3 billion, up HRK 20 billion or 9.1% from September 2020 and up HRK 1.6 billion or 0.7% from August 2021.

Citing HNB data from August, they underscored that a year-on-year growth of deposits was recorded in all counties.

In terms of the distribution of household deposits by banks, the concentration of deposits is the highest in the City of Zagreb, whose citizens had HRK 67.2 billion in savings at the end of August, a share of 29% percent.

Broken down by counties, per capita deposits exceed HRK 50,000 in the Adriatic Croatia counties, with the exception of Lika-Senj County, while the City of Zagreb and Zagreb County are the only continental counties to register such per capita deposits.

Istria County tops the list with per capita deposits of HRK 85,249, followed by the City of Zagreb (HRK 83,049), while Vukovar-Srijem County (HRK 26,068) ranks last. At the level of Croatia, per capita deposits amount to HRK 57,555, up from last year's HRK 53,103, the HGK analysis showed.

The share of time deposits is 33.6%, down 4.7 percentage points compared to the end of last year, while the share of savings deposits has reached 35%, up 2.2 percentage points, and the share of deposit money has reached 31.4%, up 2.5 percentage points.

Huge oscillations in savings

Josip Zaher of the HGK said in a statement carried by the press release that the increase in savings of Croatian citizens was not surprising given that in every crisis, this time caused by the COVID-19 pandemic, people always saved more.

As long as uncertainty regarding future economic trends is heightened, the same will apply to savings, said Vedran Šošić of the HNB, underscoring that oscillations in saving were huge.

Thus, amid the outbreak of the pandemic and the consequent lack of goods, and especially services, as well as caution and fear due to a potential loss of income, savings doubled overnight.

The reopening of the economy and the recovery of confidence enabled a gradual return to pre-pandemic patterns of spending and savings, although savings are generally still slightly higher than usual, said Šošić.

He also said that the majority of money surpluses accumulated after the outbreak, citizens deposited in banks. Also, savings were directed to the repayment of consumer debt, and investment in residential real estate is always popular, so housing loans grew increasingly fast, with increasingly obvious signs of overvaluation.

Member of the Management Board of the pensions funds management company Raiffeisen, Eva Horvat, stressed that nearly 400,000 Croatian citizens were saving in one of the voluntary pension funds, which contained assets of HRK 7.3 billion.

Savings growth constant in Croatia

On the occasion of World Savings Day, Zagrebačka Banka (Zaba) also released an analysis, in which Hrvoje Dolenec said that savings growth was constant in Croatia, and the reasons for that were the growth of GDP, living standards and disposable income.

"In the past two and a half years, the movement of financial assets of the Croatian population indicates an acceleration of that growth. This was especially evident during the pandemic, when the acceleration of savings was partly forced, due to limited movement and travel and less available services, such as restaurants, cafes, recreational activities, and partly voluntary, out of precaution and concern for the future," said Dolenec, noting that deposits and cash together accounted for nearly half of the total financial assets of households.

Igor Pavlović of Zaba underscored that low interest rates were certainly among the most important reasons for the reduction in the habit of opting for time deposits.

(€1 = HRK 7.509157)

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ZAGREB, 27 Oct 2021 - In the first nine months of 2021, Zagrebačka Banka generated HRK 1.07 billion in profit after taxes, up 22% on the year, according to an unconsolidated financial report released on Wednesday.

Operating revenue was HRK 2.8 billion, down 1.8% on the year, while operating costs were HRK 1.2 billion, up by HRK 9 million on the year. The cost-revenue ratio was 42.3%.

The bank's assets totaled HRK 131.3 billion, up 5.5% on the year, while net lending totalled HRK 68.6 billion, up by HRK 1.1 billion as a result of higher exposure to the government.

Client deposits were the primary source of financing and totalled HRK 106.9 billion, including a HRK 8.7 billion increase resulting mainly from household and corporate deposits.

Deposits by credit institutions were HRK 2.6 billion, down by HRK 3.1 billion.

According to a consolidated financial report for the first nine months of 2021, the Zagrebačka Banka Group generated HRK 1.28 billion in profit after taxes, up 16.2% on the year, the main contributors being Zagrebačka Banka, UniCredit Bank Mostar and UniCredit Leasing Croatia.

The group's operating revenue was HRK 3.6 billion, down 3.9% on the year, while operating costs were HRK 1.7 billion, down by HRK 4 million.

(€1 = HRK 7.5)

January the 1st, 2021 - Zagrebacka banka has donated the generous sum of one million kuna to the victims of the tragic Petrinja earthquake which struck Petrinja, Glina, Sisak and other areas across central Croatia recently.

As Poslovni Dnevnik writes, in order to help residents of the earthquake-affected areas whose homes were destroyed, Zagrebacka banka will donate one million kuna to the Croatian Red Cross, which will direct the donation to those who are the most in need of help.

Along with financial assistance to residents, Zagrebacka banka will provide clients who had a residence or headquarters in Sisak-Moslavina County on the day of the earthquake, in the period from the 31st of December, 2020 to the 28th of February, 2021, with the temporary suspension of any collection measures, which includes the temporary suspension of the execution of standing orders and direct debits, without the collection of additional costs and the calculation of default interest in that period.

Zagrebacka banka will provide more permanent measures to clients affected by the Petrinja earthquake in the coming period in the form of a moratorium on loan repayment. The bank has stated that it plans to inform clients in more detail about all of the assistance measures on offer and the conditions of their application on the official Zagrebacka banka website.

"Aware of the role we have in supporting the community in which we operate, we're doing everything we can to help those who need help the most at the moment. In these difficult moments, we sympathise with all the victims of the devastating earthquake that hit central Croatia, and especially those who lost their loved ones,'' said Romeo Collina, President of the Management Board of Zagrebacka banka.

Many employees of Zagrebacka banka have personally participated in numerous organised humanitarian actions and are helping the residents of the affected areas. Zagrebacka banka would like to thank all employees of the emergency and rescue services, as well as all people from all over Croatia, who once again showed how big their hearts truly are and united in helping those who have suffered losses.

For more on the Petrinja earthquake, follow our dedicated section.

November 11, 2020 - Zagrebacka banka has launched the interactive platform prviput.hr to help you discover Croatia's hidden gems. 

HRTurizam reports that from now on, everyone who wants to explore new locations in Croatia can find the country's undiscovered gems for their next trip or excursion at prviput.hr.

The interactive platform prviput.hr is a unique place with information on unexplored tourist experiences in Croatia, launched as part of a project by which Zagrebacka banka provides support to small entrepreneurs in tourism.

The platform brings together information about interesting locations, services, and tourism products. At the same time, it allows small entrepreneurs and family farms to introduce themselves to local guests.

Visitors will be able to discover the stories of the winners of the project, which was launched by Zagrebacka banka in September, and more than 150 locations registered for the tender will be marked and described on the map.

An additional 60 hidden natural beauties will be plotted on the map, discovered by the Croatian National Tourist Board. Everyone who visits prviput.hr will be able to find inspiration for their next trip in just a few clicks, as well as directly contact the owners of the marked locations with inquiries about accommodation, tourism, gastronomy, and other offers.

As part of the project, an expert jury brought together by Zagrebacka banka selected 15 unique locations and experiences that enrich Croatia's tourist offer.

Two of them, Heritage Hotel Frankopan from Ogulin and Ranch Ramarin not far from Slavonski Brod, have won a major marketing campaign that includes a TV advertisement. In contrast, others will be promoted on digital channels.

The TV advertisement for the Heritage Hotel Frankopan in Ogulin has already been presented to the audience and has won the sympathy of viewers with its charm and beautiful family story. The hotel is recognized as a cultural asset and is located next to the Frankopan Tower and Ivana's fairytale house.

With accommodation in 21 rooms bearing the names of the characters of the famous writer Ivana Brlić Mažuranić, guests will feel the spirit of the past, enjoy the many facilities and try traditional local dishes, including 30 types of pancakes.

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As Poslovni Dnevnik writes on the 3rd of November, 2020, the Financial Inspectorate of the Republic of Croatia has issued a decision by which the otherwise popular Zagrebacka banka was found guilty and fined an eye-watering amount.

The guilty verdict comes as a result of the supervision of the Croatian National Bank which established that in the period from the 1st of January 2017 to the 8th of November 2019, Zagrebacka banka failed to implement all of the necessary measures, actions and procedures as prescribed by the Law on Prevention of Money Laundering and Terrorist Financing (ZSPNFT). As a result of the finding, a single fine in the amount of 33,000,000 kuna was published on the CNB's website. However, as Poslovni Dnevnik/Ana Blaskovic reports, the bank has earned a discount on that huge fine, and will now pay ''only'' 22 million kuna.

According to the Misdemeanor Law, if the bank pays the fine within a month, which it will do, Zagrebacka banka will ultimately only pay the aforementioned ''discounted'' amount of 22 million kuna.

The decision of the Financial Inspectorate was made and became final on October the 30th, 2020. This fine is the highest misdemeanor ever imposed on a credit institution in all of Croatia, not only in the field of the prevention of money laundering and terrorist financing, but also in all areas for which the misdemeanor liability of credit institutions can be prescribed. In this case, the Croatian National Bank, as the supervisory body and authorised prosecutor, complied with the obligations under the Misdemeanor Law, informed Zagrebacka banka of its right to come to an agreement, which Zagrebacka banka used, admitted guilt and agreed to accept the aforementioned large fine.

Zagrebacka banka: We have implemented all of the due regulatory measures

''Zagrebacka banka has resolutely implemented all of the due regulatory measures in close cooperation with the competent authorities and remains strongly committed to the continuous strengthening of the system and its processes. The entire set of measures (75) identified by the bank, and ordered by the CNB in ​​its decision, was fully implemented three months before the deadline set by the CNB,'' Zagrebacka banka stated.

The Croatian National Bank has identified a total of 11 violations related to violations of the Law on the Prevention of Money Laundering and Terrorist Financing, in the following areas:

Risk assessment of an individual business relationship
Identifying and tracking suspicious, complex and unusual transactions
Reporting suspicious transactions to the Office for the Prevention of Money Laundering
Implementation of measures of enhanced in-depth analysis of all parties
A system of internal controls to reduce and effectively manage the risk of money laundering and terrorist financing.
The aforementioned violations established by the CNB upon the supervision of Zagrebacka banka were committed in the period from the 1st of January 2017 to the 8th of November 2019, and relate to the following omissions:

It did not implement measures of enhanced in-depth party analysis for 72 clients
It did not analyse the background and purpose of 1,126 transactions that were identified as complex and unusual and didn't have an obvious economic or visible legal purpose
For 2,028 transactions made by parties, the lists of indicators weren't used as guidelines in determining the grounds for suspicion of money laundering or terrorist financing
It failed to report 1,122 suspicious transactions to the Office for the Prevention of Money Laundering
It hasn't established an effective system of internal controls to reduce and effectively manage the risk of money laundering and terrorist financing.
The number, type and duration of identified illegalities indicated structural shortcomings in the implementation of prescribed measures, actions and procedures to prevent money laundering and terrorist financing. Such conduct is particularly unacceptable given the position held by Zagrebacka banka in the financial system of the Republic of Croatia as the largest credit institution.

The amount of the fine imposed is proportional to the determined number and severity of the committed offenses.

After the completion of the CNB's supervision, Zagrebacka banka reorganised its operations and increased its capacity to detect and prevent money laundering and terrorist financing, and proceeded to implement supervisory measures based on the decision of the Croatian National Bank. Zagrebacka banka demonstrated an appropriate degree of readiness to address all of the identified weaknesses within the anti-money laundering and anti-terrorist financing system. Among other things, Zagrebacka banka has committed itself to implementing 75 measures to increase the efficiency and effectiveness of its anti-money laundering and anti-terrorist financing system. In the meantime, Zagrebacka banka informed the CNB that it had implemented all of the measures it undertook.

This case emphasises that the implementation of measures to prevent money laundering and terrorist financing by banks remains an important priority of the CNB and that it is more than determined to take all of the measures to ensure that banks comply with regulations in the field of the prevention of money laundering and terrorist financing. The Croatian National Bank expects banks to have effective and efficient anti-money laundering and anti-terrorist financing systems that should be proportionate to their size, type, scope and the complexity of their operations.

In accordance with the law, the CNB informed the Office for the Prevention of Money Laundering in detail about their decision, as well as all competent state institutions.

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As Poslovni Dnevnik writes on the 13th of January, 2020, UniCredit, of which Zagrebacka banka (Zaba) is a member, retains a leading position globally as the best bank in the field of trade and export financing according to the Euromoney Trade Finance 2020 survey.

According to Euromoney's Trade and Export Financing Survey for 2020, UniCredit is the best global provider of trade and export finance services and has been named the leading bank in the Consulting, Financing, Overall Performance and Products categories, as well as the best provider in Western Europe and Central and Eastern Europe (CEE).

It also ranked third globally in the "Market Leader" category, a category that combines market penetration, percentage of business and turnover data to create an overall ranking of the best banks for financing trade and exports.

UniCredit has won many first places in the rankings of individual countries, among them lies Croatia's Zagrebacka banka, which was named the best in the Market Leader and Best Service Provider categories.

The scope and depth of UniCredit's geographical coverage is further reflected in the fact that the bank is the market leader in Austria, Bosnia and Herzegovina, Bulgaria, the Czech Republic, Hungary, Italy, Romania, Russia, Serbia, Slovakia, and Turkey.

"Euromoney's recognition is yet another confirmation of Zagrebacka banka's leading market position in the area of ​​trade and export financing. It is the result of many years of tradition and experience, but also of the constant monitoring of market requirements and the creation of new business solutions for clients in this field. We'll continue to improve our services and in the coming period, we plan to further digitise traditional instruments of trade and export financing and new solutions in the area of ​​receivables and liquidity management,'' said Nikolaus Maximilian Linarić, Member of the Management Board of Zagrebacka banka.

The survey, which has been running for the ninth year in a row, compares the feedback gathered from over 7,000 corporate clients, convincingly showing UniCredit's product development and marketing expertise, superior customer service and a deep understanding of its key European markets.

"We're very proud of these results," said Richard Burton, UniCredit's Head of Corporate and Investment Banking.

"We strive to continually deliver our highest quality products and services to our customers, focusing on developing innovative solutions tailored to meet our customers' needs. This Euromoney survey recognises our continued efforts in these areas as we strive to support the real economy and build strong customer relationships, which is at the heart of everything we do, and we'd like to take this opportunity to thank our customers for their continued partnership and support,''

UniCredit continues to invest in trade and export finance innovations - most notably through its award-winning Trade Finance Gate customer portal - and remains committed to meeting its customers' needs by providing tailor-made trade and export financing solutions and working capital solutions.

Make sure to follow our dedicated lifestyle page for more on Zagrebacka banka and other banks which operate in Croatia.