Business corner
Interesting news from the world of corporate banking, entrepreneurship and economy related with personal savings. Other topics such as cluster development and investment projects are also included.
In 2014 Croatian banks as well as the national economy face many different challenges. The economic crisis has been among the worst in EU area, lasting six long years. The toll has begun to show in balance sheets of the largest national banks, however, in comparison to other EU systems Croatian banking market remains strong and stable.
The Croatian economy has been slow to recover from the consequences of the global crisis. This can be attributed to Croatia's poor competitiveness in European and world markets and to the imbalances inherited from previous periods when growth was fuelled by expansionary consumption and investments in sectors that do not participate in international trade. The current account deficit has narrowed persistently since the beginning of the crisis due mainly to decreasing domestic demand.
The net debt position continued to improve, due mainly to strong bank deleveraging and smaller deleveraging of public enterprises and non-banking financial institutions, while the central government and private enterprises saw their net debt positions deteriorate.
Exceptionally good liquidity of the domestic financial system, with minor oscillations, marked the domestic financial markets in 2014, prompting banks to reduce their financing in the money market. The decrease in interest rates in the euromarkets and the fall in the global risk premium marked the major part of 2014. Risk perception for Croatia improved in these circumstances, moving in line with trends in countries in the region.
ECB expansive monetary policy
Mario Draghi’s newest stimulus tool will hand banks more than 700 billion euros of cheap funding. The European Central Bank president’s targeted lending program for banks will boost credit for the real economy as planned, and at the same time help keep the financial system flush with cash. The ECB has identified loans to companies and households as a key weakness in the euro area’s fragile recovery.
Bank status and Croatian market changes
There are 25 active retail banks in Croatia, one savings bank and five housing savings banks operating in the country. In 2014, eight large banks (Zagrebačka banka, Privredna banka Zagreb, Erste&Steiermarkische Bank, Raiffeisen banka, Hypo Alpe-Adria banka, Splitska banka and Hrvatska poštanska banka) continue to dominate the market.
