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).
|Population (2016)||4 190 669 (-0.01%)|
|EU Status||member since 2013|
|National Currency||HRK (Croatian kuna)|
|Exchange Rate (2017-01-23)||1 EUR = 7.5058 HRK|
|Nominal GDP (2015)||43.9 bln EUR (+0.02%)|
|Nominal GDP per Capita (2015)||10 400 EUR (+0.02%)|
|Real GDP Growth (2015)||1.6 % (2014: -0.4 %)|
|CPI, MoM (Sep 2016)||0.2 % (Aug 2016: -0.2 %)|
|CPI, YoY (Sep 2016)||-0.7 % (Aug 2016: -1.5 %)|
|CPI, Year Average (2015)||-0.3 % (2014: 0.2 %)|
|Unemployment Rate (2015)||16.3 % (2014: 17.0 %)|
|Government Bond Yield (Sep 2016)||3.34 % (Aug 2016: 3.58 %)|
|Credit Ratings (as of Sep 2016)|
|Fitch||BB||speculative, outlook negative|
|Moody's||Ba2||non-investment grade speculative, outlook negative|
|S&P||BB||non-investment grade speculative|
|Double Taxation Agreements||54 signed agreements|
|Automatic Exchange||starts in September 2017|
|FATCA||IGA in effect since 20 March 2015, Model 1|
|Financial Market Development||3.6 (max 7.0)||rank: 95th out of 138 countries|
|Banks' Soundness||4.9 (max 7.0)||rank: 67th out of 138 countries|
|Banking Industry Country Risk||6||(1 - lowest risk, 10 - highest risk)|
|Deposit Guarantee Scheme|
|Maximum Protected Amount||100 000 EUR|
|Country Ceiling for Deposits|
|Local Currency (Croatian kuna)||Baa1||lower medium grade|
|Foreign Currency||Ba3||non-investment grade speculative|
|Deposit Rates (Aug 2016, HRK)||1.21 % (Jul 2016: 1.29 %)|
|Banking Sector Structure|
|Number of Banks||34|
|Recent Changes (2015)||new banks: 0, closed banks: 0|
|Consolidated Assets (2015)||57 588.63 mln EUR (+1.90%)|
|Zagrebacka Banka (UniCredit)||Raiffeisenbank|
|Privredna Banka (Intesa)||Splitska Banka (Societe Generale)|
|Erste & Steiermärkische Bank||Hrvatska Poštanska Banka (HPB)|
|Hypo Alpe Adria Bank|
|List of Banks in Croatia|
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.
According to Eurostat, nominal GDP of Croatia in 2015 was 43.9 bln EUR.
Croatia underperforms the European Union in terms of real GDP growth with the average annual differential coming to -0.3% over the past 10 years (2005 - 2015). In 2015 real GDP growth was 1.6% which was equal to the Euro Area average (1.6%) and below the European Union average (1.9%). Real GDP growth in 2016 - 2021 are IMF's estimates.
In 2015, nominal GDP per capita in Croatia was 10 400 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 -37.0% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2021 are IMF's estimates.
According to Eurostat, inflation rate in Croatia in 2015 expressed as annual percentages of average consumer prices was -0.3% which was below the Euro Area average (0.0%) and below the European Union average (0.0%). Inflation rates in 2016 - 2021 are IMF's estimates.
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Croatia signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
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.
Croatia signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
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).
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.
FATCA and European countries
According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in Croatia is scored 3.6 out of maximum 7.0 and ranked 95th out of 138 analysed economies. Soundness of banks is scored 4.9 bringing Croatia into the 67th place, trustworthiness and confidence of financial market is scored 4.1 (81st place).
Banking Industry Country Risk Assessment (BICRA) is a methodology designed by Standard&Poor's "to evaluate and compare global banking systems". A BICRA is scored on a scale from 1 to 10, ranging from the lowest-risk banking systems (group 1) to the highest-risk (group 10). The BICRA methodology has two main analytical components: "economic risk" and "industry risk". Each of the components is then further divided into 3 "factors" that result in an economic and industry risk score for each country.
Croatia is included into group '6' with economic risk scored '7' and industry risk scored '5'.
|Credit risk in economy||high|
|Government support assessment||supportive|
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:
All these details about deposit guarantee scheme in Croatia are summarised in Table 2.
|Scheme Participants||all credit institutions operating in Croatia (including branches of foreign banks), branches of Croatian banks abroad|
|Eligible Depositors||natural persons, small entrepreneurs and non-profit organisations|
|Covered Accounts||all deposits|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||HRK|
Table 2. Deposit guarantee scheme in Croatia.
Deposit Guarantee Schemes in Europe
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) deposit ceiling for Croatia is set to Baa1 (lower medium grade), foreign currency deposit ceiling is Ba3 (non-investment grade speculative).
Compare Bank Deposits in Croatia
Currently there are 34 credit institutions operating in Croatia.
Recent structural changes (2013 - 2015) of the banking sector of Croatia are summarised in Table 3.
|Number of Opened Banks||0||0||0|
|Number of Closed Banks||0||2||0|
Table 3. Recent structural changes in the banking sector of Croatia.
All the credit institutions operating in Croatia can be classified into several categories. Table 4 summarises the number of banks in each category.
|Category||Number of Banks|
|Housing savings banks||5|