Page 83 - SE Outlook Regions 2022

the government’s policy is to restrict the access to public areas only for
unvaccinated people.

q

3.4.2 Banks

Croatian banks remained stable during the coronacrisis thanks to the
prudent measures of the central bank. The country also joined the EU’s
banking union in 2020, which was additional guarantee for the stability
of the sector.

In 2021, the sector performed well and remained liquid. Banking system
liquidity measured by the liquidity coverage ratio (LCR) continues to be
high (206.9%), with all credit institutions meeting the minimum liquidity
requirements, according to central bank data for the first nine months of
the year.

At the end of September 2021, total assets of credit institutions stood at
HRK493.0bn, up by 6.6% from the end of 2020. Assets increased in
most credit institutions.

The increase in total loans and advances by 6.4% and the decrease in
non-performing loans (NPLs) by 8.1% resulted in a further decline in the
share of NPLs in total loans, from 5.4% at the end of 2020 to 4.7% at
the end of September 2021.

The decline in total NPLs was driven by their decline in non-financial
corporations, with the share of this sector’s NPLs in loans falling from
12.5% to 10.7%. NPLs continued to rise in the portfolio of household
loans; however, owing to a rise in loans and advances to that sector,
the share of NPLs held steady at 7.1%.

Meanwhile, the sector remained profitable, generating a net profit of
HRK4bn at the end of September 2021, an increase of 59.3% over the

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