“In 2017, we maintained the stability and quality of our operating business and that way we have strengthened our position on Croatia’s banking and financial market. We are especially pleased with the rising trend in new loans in the retail and corporate business segments. We witnessed some major challenges last year as well, like the process of restructuring in Agrokor that also had an impact on the operation of the banking sector”, said Christoph Schoefboeck, Chairman of the Management Board of Erste Bank Croatia, commenting on the business results for 2017 and added: “We will continue to strive to provide quality support to our clients in the realisation of their financial needs and business plans, also giving an adequate impetus towards the growth of the Croatian economy as a whole.”

IN BRIEF

According to the non-consolidated financial report, which includes the results of Erste Bank Croatia (the bank), without subsidiaries, net profit was HRK 649.5 million, up by 3.67 percent compared to HRK 626.5 million in 2016. Net interest income was up by 4.72 percent, from HRK 1.6 billion in 2016 to HRK 1.7 billion in 2017. Net fee and commission income were up by 8.43 percent, from HRK 410.2 million the year before to HRK 444.7 million in 2017.

The bank’s assets amounted to HRK 57.2 billion at the end of 2017, up 1.94 compared to HRK 56.1 billion at 2016YE. As of 31 December 2017, total loans stood at HRK 36.5 billion, up by 0.71 percent compared to HRK 36.3 billion at 2016YE. Total deposits as of end of December 2017 amounted to HRK 42.3 billion and were up 2.44 percent compared to HRK 41.3 billion at 2016YE.

In 2017, the bank has recorded positive trends in the segment of new loans. In the retail segment, which includes micro-companies, an increase in new loans of around 35% was achieved, from around HRK 3.1 billion in 2016 to around HRK 4.2 billion in 2017. In the new housing loans and home improvement loans, a growth of about 63% was achieved, from about HRK 579.8 million in 2016 to around HRK 946.3 million in 2017. Positive trends have also been recorded in the corporate business segment, where an increase in new loans of around 7% was achieved in 2017, from about HRK 7.1 billion in 2016 to about HRK 7.6 billion in the last year.

EBC Group’s net profit after minority interest amounted to HRK 533.7 million. The most significant negative contribution to its decrease compared to 2016 (when it amounted to HRK 874.4 million) came from the increased risk provisions that resulted from the situation in Agrokor and its associated companies. EBC Group’s net interest income remained stable and stood at HRK 2.07 billion, compared to HRK 2.06 billion in 2016. Net fee and commission income grew by 7.82 percent, from HRK 663.2 million in 2016 to HRK 715.0 million in 2017.

EBC Group’s total assets amounted to HRK 65.9 billion at 2017YE and were up by 0.49 percent compared to HRK 65.6 billion at 2016YE. Total loans as of 31 December 2017 amounted to HRK 43.3 billion, down by 0.82 percent compared to HRK 43.7 billion as of 31 December 2016. Total deposits of EBC Group’s clients amounted to HRK 44.4 billion and were 2.42 percent higher compared to HRK 43.3 as of the end of December 2016.

OUTLOOK

To a large extent, the year 2017 saw the continuation of positive economic trends from the previous period, which is a reason for slight optimism. One positive contribution also came from the continued fiscal consolidation in Croatia, consequently leading to the closure of the Excessive Deficit Procedure and setting the stage for an open debate about the potential of joining the euro area.

“During 2018, economic trends are expected to remain beneficial for growth and, hopefully, for maintaining the fiscal discipline. However, more effort is still needed to implement structural reforms, as well as to come up with both political and economic responses to demographic challenges and the growing trend of population outflow. Legal and political stability both remain one of the basic prerequisites for maintaining the process of recovery. Moreover, it is necessary to build and nurture a secure investment environment for local and international investors”, said Schoefboeck and concluded: “The positions of Erste Bank Croatia and the EBC Group in the Croatian market remain stable and make a sound foundation for the future. We want our success to be sustainable and long-term, to result from the quality selection and financial backing of those projects that are sound and profitable, to be based on partnership relations that we maintain with our clients and other stakeholders in the social community and the produce stronger mutual trust based on open and transparent communication. Our common goals are success, satisfaction, and prosperity – of our clients and of society in Croatia as a whole.”