BANKING SYSTEM STABLE

ZAGREB, May 9 (Hina) - The Croatian National Bank (HNB) on Thursday forwarded its annual report to the Sabor one month earlier than usual. The main highlights of the report indicate that the central bank achieved its basic objective - to maintain a low inflation rate and to maintain stability in Croatia's banking system. #L# The total assets of the banking system at the end of last year amounted to US$18.55 billion, which is 33.1 per cent more than at the end of 2000. Of 43 banks, 38 made a total profit of US$0.25 billion, while five banks indicated a loss amounting to US$17.69 million in total. Twenty-four banks with a majority foreign ownership account for 89.3 per cent of the assets of all banks, while three banks that are mostly state-owned control five per cent of the market. The remaining 16 banks, mostly domestically owned, have a 5.7 percent shares in the market. The HNB report gives an overview of the situation surrounding the Rijecka Bank crisis and activities that were undertaken by the central bank to resolve this situation. The report notes that the HNB acted entirely in keeping with the law, regulations and supervisory standards during the Rijecka Bank affair. The report emphasised the need for improvement in current regulations and proposes that the new law on banks touches on the issues of supervision, i.e. that this remains within the jurisdiction of the HNB as is the case in the EU. (hina) sp sb