ZAGREB, May 7 (Hina) - Foreign ownership in the Croatian banking sector amounts to some 85 percent and apart from the process of foreign "take-overs", Croatia's banking sector is marked by growing concentration so that the country's
two leading banks account for almost one half of assets of all commercial banks in Croatia. According to the latest data from the Croatian National Bank (HNB), there are 43 banks, 20 savings banks, four housing credit banks, one development bank (HBOR) and six foreign bank offices in Croatia. Of the 43 commercial banks, foreigners have majority ownership in 21 banks and hold smaller shares in several other banks, while the majority owners of all leading banks are foreign nationals. The consolidation of the banking sector is characterised by the reduction of the number of banks in the past two years - from 60 in 1998 to 53 in 1999 and 44 in 2000. Since 1996, 12 ban
ZAGREB, May 7 (Hina) - Foreign ownership in the Croatian banking
sector amounts to some 85 percent and apart from the process of
foreign "take-overs", Croatia's banking sector is marked by
growing concentration so that the country's two leading banks
account for almost one half of assets of all commercial banks in
Croatia.
According to the latest data from the Croatian National Bank (HNB),
there are 43 banks, 20 savings banks, four housing credit banks, one
development bank (HBOR) and six foreign bank offices in Croatia.
Of the 43 commercial banks, foreigners have majority ownership in
21 banks and hold smaller shares in several other banks, while the
majority owners of all leading banks are foreign nationals.
The consolidation of the banking sector is characterised by the
reduction of the number of banks in the past two years - from 60 in
1998 to 53 in 1999 and 44 in 2000. Since 1996, 12 banks and four
savings banks have gone bankrupt. Six banks have been consolidated,
and four state banks have been privatised in the past two years.
The two leading banks - Zagrebacka Banka (with assets worth 32.6
billion kuna) and Privredna Banka Zagreb (with 20.6 billion kuna) -
account for 47.2 percent of the overall assets of commercial banks
in Croatia, which amounted to 112.7 billion kuna at the end of last
year, according to the HNB. Together with Rijecka Banka (with
assets worth 7.9 billion kuna), Splitska Banka (eight billion) and
Raiffeisenbank Austria (5.1 billion kuna), they make Croatia's
five leading banks which account for 65.8 percent of all assets of
the Croatian banking system.
The arrival of foreign banks in Croatia's banking market has caused
considerable public interest as well as occasional debates.
HNB experts have estimated that the arrival of foreign banks has
mostly benefited Croatia because those banks have brought
significant assets and have mildly stimulated competition and
development of new products and services.
At the same time, the HNB analysts believe it is yet to be seen
whether the current significant share of foreign ownership in the
banking sector will yield more significant results on the market.
So far, the arrival of foreign banks has intensified competition
only to some extent, e.g. as regards interest rates. However, most
market competitors expect competition to increase in the coming
period and that such trends can already be registered.
There is no need to fear that foreign banks "are taking the Croatian
money and sending it elsewhere." Moreover, they issue more assets
to Croatian subjects than they receive from Croatian depositors,
the HNB analysts say.
Some experts believe that foreign banks will not function as the
moving force of Croatia's economic development. Therefore, they
suggest the establishment of two banks with the state as the
majority owner or biggest shareholder. One of those banks would be
oriented toward tourism and farming. Banks with the state capital,
they say, would give the government instruments necessary for the
much needed fruitful influence on reconstruction processes and
economic revival.
(hina) sb rml