Page 84 - SE Outlook Regions 2022

same period in 2020. As a result, the return on assets (ROA) rose from
0.8% to 1.1% and return on equity (ROE) rose from 5.5% to 8.3%.

The effects of retained profit for 2020 and targeted regulatory
adjustments related to the pandemic resulted in high values of key
indicators of banking system capitalisation. At the end of September
2021, the total capital ratio of the banking system stood at 25.6%, with
all credit institutions maintaining total capital ratios above the minimum
of 8%.

In 2022, the banking sector is expected to remain stable and profitable.

However, Croatian banks will still face challenges in 2022 and will have
to invest between €80mn and €100mn to adjust their IT systems to the
adoption of the euro, according to Zdenko Adrovic, head of the Croatian
Banking Association (HUB).

Croatia is preparing to adopt the single European currency and the
government hopes it will join the Eurozone at the beginning of 2023.

3.4.3 Industry

Croatia’s star industrial company is the electric supercar producer
Rimac Group, which has been going from strength to strength and is
expected to develop even further in 2022. Rimac has attracted a lot of
attention from the car industry as the world’s major automakers prepare
for the electric future.

The company launched a joint company with Bugatti Automobiles,
Bugatti Rimac, in November. The Rimac Group will be the major
shareholder in Bugatti Rimac with a 55% stake. Founder Mate Rimac
will retain his shareholding in Rimac Group at 35%, with Porsche at
22%, Hyundai Motor Group at 11% and other investors at 32%.

The development, production and supply of battery systems, drivetrains
and other electric vehicle (EV) components will be separated into a new
entity, Rimac Technology, which will be 100% owned by the Rimac
Group. Rimac Technology will remain an independent company working
with many global car manufacturers.

Meanwhile, Rimac Group kicked off construction of a new global
headquarters that will be located near the capital Zagreb. The project it
estimated to cost €200mn. The complex will cover 100,000 square
metres and should be completed by 2023.

The new headquarters will serve as the company’s international R&D
and production base. The company’s goal is to ramp up there from
prototype and smaller volume projects to high-volume production of its
high-performance electric drivetrain and battery systems for many
global car companies. At the same time, the Campus will serve as the
production base for all future Rimac models and their key components,
including the Rimac Nevera.

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