Croatian credit institutions posted a net profit of €375 million in the first quarter of 2025, down 9.4% from a year earlier, the Croatian National Bank (HNB) said on Friday.
The sector, which includes 19 banks and one housing savings bank, reported weaker profitability, with return on assets (ROA) falling to 1.8% from 2.12% and return on equity (ROE) dropping to 15.4% from 18.07% in Q1 2024.
Total assets declined by 0.6% from the end of 2024 to €83.7 billion, as most institutions saw a decrease. Gross loans and advances fell 4%, largely due to a drop in highly liquid assets, including central bank balances and other demand deposits.
Despite the overall decline, lending to key sectors continued: loans to non-financial corporations rose 5%, while household lending increased 2.8%.
The share of non-performing loans (NPLs) in total loans inched up to 2.5% from 2.4% at the end of 2024, although the nominal amount remained unchanged. The central bank said the rise was due to the drop in total loans. NPL ratios for corporate and household loans declined to 4.3% and 3.6%, respectively.
Liquidity remained strong, with all institutions meeting the minimum liquidity coverage ratio (LCR) of 100%. The average LCR stood at 222.2% at the end of the quarter, the HNB said.