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Economy and Banking Sector of Croatia

Croatia
Location
Southeastern Europe
Population  (2017)
4 154 213  (-0.01%)
EU Status
member since 2013
Currency
HRK (Croatian kuna)
Nominal GDP (2016)
45.6 bln EUR  (+0.04%)
Credit Ratings (as of Sep 2016)
BB/Ba2
Consolidated Banking Assets (2016)
58 082.20 mln EUR  (+0.86%)
Deposit Guarantee
100 000 EUR
Number of Banks
33

Croatia is a country in southeastern Europe, a member of the European Union since 2013.

The major sectors of the Croatian economy are shipbuilding, food processing, chemical industry, information technology, real estate services and tourism. Croatia is still recovering from the global financial crisis of 2008 with government bureaucracy, corruption, and high tax rates making the recovery process even slower.

The banking system of Croatia is characterized by relatively high concentration: competition between the major banks is making it difficult for other banks to compete. Another feature of the Croatian banking system is a prominent share of foreign capital (mainly from Austria and Italy).

List of Banks in Croatia

National Currency

Croatian Kuna (HRK)

Exchange Rate

1 EUR = 7.4445 HRK (2018-02-22)

During the last 11 years EURHRK exchange rate was within the range 7.1049 - 7.6975, reaching its maximum in Jan 2015 and falling to its minimum in Sep 2008.

Euro to Croatian kuna (EURHRK).

Chart 1. Euro to Croatian kuna (EURHRK). Source: ECB.

GDP

Nominal GDP (2016)Nominal GDP per Capita (2016)Real GDP Growth (2016)
45.6 bln EUR  (+0.04%)10 900 EUR  (+0.05%)2.9 %  (2015: 1.6 %)

According to Eurostat, nominal GDP of Croatia in 2016 was 45.6 bln EUR.

Croatia outperforms the European Union in terms of real GDP growth with the average annual differential coming to 0.1% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 2.9% which was above the Euro Area average (1.8%) and above the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.

Real GDP Growth in Croatia.

Chart 2. Real GDP Growth in Croatia. Source: Eurostat, International Monetary Fund.

In 2016, nominal GDP per capita in Croatia was 10 900 EUR.

Croatia has a below-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, fell behind that of the European Union by -36.5% over the past 10 years (2006 - 2016). GDP per capita at PPP in 2017 - 2022 are IMF's estimates.

GDP Per Capita at Purchasing Power Parity in  Croatia; European Union = 100.

Chart 3. GDP Per Capita at Purchasing Power Parity in Croatia; European Union = 100.

Inflation Rate

CPI, MoM (Sep 2017)CPI, YoY (Sep 2017)CPI, Year Average (2016)
0.3 %  (Aug 2017: 0.0 %)1.6 %  (Aug 2017: 1.5 %)-0.6 %  (2015: -0.3 %)

According to Eurostat, inflation rate in Croatia in 2016 expressed as annual percentages of average consumer prices was -0.6% which was below the Euro Area average (0.2%) and below the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.

Inflation Rate in Croatia.

Chart 4. Inflation Rate in Croatia. Source: Eurostat, International Monetary Fund.

Unemployment Rate

Unemployment Rate (2016)
13.3 %  (2015: 16.3 %)

Government Bond Yield

Government Bond Yield (Sep 2017)
2.71 %  (Aug 2017: 2.87 %)
According to Eurostat, government bond yield in Croatia in Sep 2017 was 2.71%, compared to 2.87% in Aug 2017.
Government bond yield of Croatia.

Chart 5. Government bond yield of Croatia. Source: Eurostat.

Credit Ratings (as of Sep 2016)

Fitch Moody's
BB (speculative), outlook negative Ba2 (non-investment grade speculative), outlook negative

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of Croatia: 54 Signed Agreements

Croatia signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):

 Albania
 Armenia
 Austria
 Azerbaijan (Mar 2013)
 Belarus
 Belgium
 Bosnia and Herzegovina
 Bulgaria
 Canada
 Chile
 China
 Czech Republic
 Denmark
 Estonia
 Finland
 France
 Georgia (Dec 2013)
 Germany
 Greece
 Hungary
 Iceland
 Indonesia
 Iran, Islamic Republic of
 Ireland
 Israel
 Italy
 Jordan
 Korea, Republic of
 Kuwait
 Latvia
 Lithuania
 Macedonia
 Malaysia
 Malta
 Mauritius
 Moldova, Republic of
 Montenegro
 Morocco
 Netherlands
 Norway
 Poland
 Qatar
 Romania
 Russian Federation
 Serbia
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 Turkey
 Ukraine
 United Kingdom

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Automatic Exchange: Starts in September 2017

Croatia signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Automatic Excnange: 54 Bilateral Agreements to Receive Information

Croatia has signed bilateral agreements with 54 jurisdictions to automatically receive information:

 Andorra
 Argentina
 Australia
 Austria
 Belgium
 Bonaire, Saint Eustatius and Saba
 Bulgaria
 China
 Colombia
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Faroe Islands
 Finland
 France
 Germany
 Gibraltar
 Greece
 Greenland
 Guernsey
 Hungary
 Iceland
 India
 Ireland
 Isle of Man
 Italy
 Japan
 Jersey
 Korea, Republic of
 Latvia
 Liechtenstein
 Lithuania
 Luxembourg
 Malaysia
 Malta
 Mauritius
 Mexico
 Monaco
 Netherlands
 New Zealand
 Norway
 Poland
 Portugal
 Romania
 San Marino
 Seychelles
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 United Kingdom

Automatic Excnange: 65 Bilateral Agreements to Send Information

Croatia has signed bilateral agreements with 65 jurisdictions to automatically send information:

 Andorra
 Anguilla
 Argentina
 Australia
 Austria
 Belgium
 Belize
 Bermuda
 Bonaire, Saint Eustatius and Saba
 British Virgin Islands
 Bulgaria
 Cayman Islands
 China
 Colombia
 Costa Rica
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Faroe Islands
 Finland
 France
 Germany
 Gibraltar
 Greece
 Greenland
 Guernsey
 Hungary
 Iceland
 India
 Indonesia
 Ireland
 Isle of Man
 Italy
 Japan
 Jersey
 Korea, Republic of
 Latvia
 Liechtenstein
 Lithuania
 Luxembourg
 Malaysia
 Malta
 Mauritius
 Mexico
 Monaco
 Montserrat
 Netherlands
 New Zealand
 Norway
 Poland
 Portugal
 Romania
 Saint Lucia
 Samoa
 San Marino
 Seychelles
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 Turks and Caicos Islands
 United Kingdom

Further Information

FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

FATCA Status in Croatia
IGA in effect since 20 March 2015, Model 1

Croatia has FATCA agreement with the U.S. in effect since 20 March 2015 (Intergovernmental Agreement Model 1). Financial institutions operating in Croatia are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Croatian financial accounts hold in U.S. financial institutions will be reported to Croatian authorities.

Further Information

Financial Market Development

Financial Market Development
3.6 (max 7.0), 95th out of 138 countries
Banks' Soundness
4.9 (max 7.0), 69th out of 138 countries

According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Croatia is scored 3.6 out of maximum 7.0 and ranked 95th out of 138 analysed economies, trustworthiness and confidence of financial market is scored 4.2 (78th place).

Financial Market Development in Croatia.

Chart 6. Financial Market Development in Croatia. Source: WEF.


Soundness of banks is scored 4.9 bringing Croatia into the 69th place.

Soundness of Banks in Croatia.

Chart 7. Soundness of Banks in Croatia. Source: WEF.

Further Information

Deposit Guarantee Scheme

Maximum Protected Amount
100 000 EUR

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Croatia are summarised in Table 1.

Scheme Participantsall credit institutions operating in Croatia (including branches of foreign banks), branches of Croatian banks abroad
Eligible Depositorsnatural persons, small entrepreneurs and non-profit organisations
Covered Accountsall deposits
Maximum Protected Amount100 000 EUR
Paid In CurrencyHRK

Table 1. Deposit guarantee scheme in Croatia.

Further Information

Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local Currency (Croatian kuna) Foreign Currency
Baa1 (lower medium grade) Ba3 (non-investment grade speculative)

Local currency (Croatian kuna) deposit ceiling for Croatia is set to Baa1 (lower medium grade), foreign currency deposit ceiling is Ba3 (non-investment grade speculative).

Deposit Rates

Average Deposit Rate (Aug 2017, HRK)
0.73 %  (Jul 2017: 0.71 %)
In Aug 2017, an agreed annualised deposit rate in local currency (Croatian kuna) of new contracts with agreed maturity up to 1 year between credit institutions and households was 0.73%.
Deposit Rates in Croatia.

Chart 8. Deposit Rates in Croatia. Source: ECB.

Further Information

Banking Sector Structure

Number of Banks
33
Consolidated Assets (2016)
58 082.20 mln EUR  (+0.86%)
Recent Changes (2016)
new banks: 0, closed banks: 1

Currently there are 33 credit institutions operating in Croatia.

In 2016 consolidated banking assets in Croatia were 58 082.20 mln EUR. The consolidated banking assets' evolution is shown at Chart 9 below.

Consolidated banking assets in Croatia.

Chart 9. Consolidated banking assets in Croatia.

Recent structural changes (2013 - 2016) of the banking sector of Croatia are summarised in Table 2.

2013201420152016
Number of Opened Banks0000
Number of Closed Banks0201

Table 2. Recent structural changes in the banking sector of Croatia.

All the credit institutions operating in Croatia can be classified into several categories. Table 3 summarises the number of banks in each category.

CategoryNumber of Banks
Banks25
Branches of foreign banks1
Central banks1
Housing savings banks5
Savings banks1

Table 3. Number of banks by category in Croatia.

There are 1 branches of foreign banks from 1 different countries in Croatia. Table 4 shows the number of branches grouped by the country of origin.

Country of OriginNumber of Branches
 Austria1

Table 4. Number of branches of foreign banks in Croatia grouped by country of origin.

Major Banks of Croatia

RankNameTotal AssetsMarket Share
1 Zagrebacka Banka (UniCredit)105131.34 mln HRK26.51 %
2 Privredna Banka (Intesa)72438.73 mln HRK18.27 %
3 Erste & Steiermärkische Bank56118.73 mln HRK14.15 %
4 Raiffeisenbank31423.73 mln HRK7.92 %
5 Splitska banka d.d.27044.69 mln HRK6.82 %
6 Addiko Bank d.d.21099.10 mln HRK5.32 %
7 Hrvatska Poštanska Banka (HPB)19357.72 mln HRK4.88 %
 

Zagrebačka banka d.d.

Zagrebačka banka d.d. is a universal bank, offering retail and corporate banking products and services to its customers.

Zagrebačka banka d.d. is the 1st largest bank in Croatia in terms of total assets. In 2016 its total assets were 105,13 bln HRK, providing the bank with the market share of 26.51%. In 2016 the bank's annual profit was 1 709,33 mln HRK.

Zagrebačka banka d.d. is rated by Fitch. Long-term credit rating assigned to the bank by Fitch is BBB- (good credit quality). Zagrebačka banka d.d. participates in deposit guarantee scheme of Croatia. This scheme covers accounts up to 100 000 EUR per bank per depositor.

Privredna banka Zagreb d.d.

Privredna banka Zagreb d.d. is a universal bank, offering retail and corporate banking products and services to its customers.

Privredna banka Zagreb d.d. is the 2nd largest bank in Croatia in terms of total assets. In 2016 its total assets were 72 438,73 mln HRK, providing the bank with the market share of 18.27%. In 2016 the bank's annual profit was 1 605,19 mln HRK.

Privredna banka Zagreb d.d. participates in deposit guarantee scheme of Croatia. This scheme covers accounts up to 100 000 EUR per bank per depositor.

Erste & Steiermärkische Bank d.d.

Erste & Steiermärkische Bank d.d. is a universal bank, offering retail and corporate banking products and services to its customers.

Erste & Steiermärkische Bank d.d. is the 3rd largest bank in Croatia in terms of total assets. In 2016 its total assets were 56 118,73 mln HRK, providing the bank with the market share of 14.15%. In 2016 the bank's annual profit was 626,51 mln HRK.

Erste & Steiermärkische Bank d.d. participates in deposit guarantee scheme of Croatia. This scheme covers accounts up to 100 000 EUR per bank per depositor.

Raiffeisenbank Austria d.d.

Raiffeisenbank Austria d.d. is a universal bank, offering retail and corporate banking products and services to its customers.

Raiffeisenbank Austria d.d. is the 4th largest bank in Croatia in terms of total assets. In 2016 its total assets were 31 423,73 mln HRK, providing the bank with the market share of 7.92%. In 2016 the bank's annual profit was 460,22 mln HRK.

Raiffeisenbank Austria d.d. participates in deposit guarantee scheme of Croatia. This scheme covers accounts up to 100 000 EUR per bank per depositor.

Splitska banka d.d.

Established in 1864, Société Générale is one of the largest French banks. Société Générale is a universal bank, offering its clients retail, corporate, investment banking products and services as well as private banking and asset management.

Splitska banka d.d. is the 5th largest bank in Croatia in terms of total assets. In 2016 its total assets were 27 044,69 mln HRK, providing the bank with the market share of 6.82%. In 2016 the bank's annual profit was 365,12 mln HRK.

Splitska banka d.d. is rated by Fitch. Long-term credit rating assigned to the bank by Fitch is NR (not rated). Splitska banka d.d. participates in deposit guarantee scheme of Croatia. This scheme covers accounts up to 100 000 EUR per bank per depositor.

Addiko Bank d.d.

Addiko Bank was established in 2015, when Advent International and the European Bank for Reconstruction and Development acquired Hypo Alpe Adria with its Southeast Europe banking network from Heta Asset Resolution.

Services
Retail Banking

Addiko Bank d.d. is the 6th largest bank in Croatia in terms of total assets. In 2016 its total assets were 21 099,10 mln HRK, providing the bank with the market share of 5.32%. In 2016 the bank's annual profit was 59,22 mln HRK.

Addiko Bank d.d. participates in deposit guarantee scheme of Croatia. This scheme covers accounts up to 100 000 EUR per bank per depositor.

Hrvatska poštanska banka d.d.

Hrvatska poštanska banka d.d. is a universal bank, offering retail and corporate banking products and services to its customers.

Hrvatska poštanska banka d.d. is the 7th largest bank in Croatia in terms of total assets. In 2016 its total assets were 19 357,72 mln HRK, providing the bank with the market share of 4.88%. In 2016 the bank's annual profit was 188,28 mln HRK.

Hrvatska poštanska banka d.d. participates in deposit guarantee scheme of Croatia. This scheme covers accounts up to 100 000 EUR per bank per depositor.

Time Deposit Accounts: 46 Offers from 4 Banks

Interest Rates: 0.10 - 2.00 % p.a.
Deposit Terms: 6 - 120 months

46 time deposit accounts offers from 4 banks operating in Croatia are currently available. The time deposit accounts terms vary from 6 month to 10 years (120 months).The interest rates are within the range 0.10 - 2.00 %.

View All Offers
Highest Interest Rate Offer: Festgeld (Banka Kovanica d.d.)
Interest Rate: 2.00 % p.a.
Deposit Term: 60 months

Established in 1997, Banka Kovanica since May 2007 is owned by Cassa di Risparmio della Repubblica di San Marino. Banka Kovanica provides retail and corporate banking products and services to both domestic and international clients.