The Croatian National Bank (HNB) had earlier reported that of a total of HRK 279.9 billion in loans, as much as HRK 47.4 billion or 16.95% of loans were considered as partially or totally irrecoverable.
Compared to the preceding quarter, the share of bad loans was mildly reduced, by 0.29 percentage points from the 17.24% recorded last September. On an annual level, non-performing loans were up 1.25 percentage points compared with the end of 2013, rising from 15.70% at the end of 2013 to 16.95% at the end of 2014.
The central bank reported that the retail sector continued to have significantly more problems with servicing loans, with 30.51% being considered as partially or totally irrecoverable, whereas citizens accounted for 12% of non-performing loans.
HUB notes that the greatest problem in repayment occurs with kuna-valued loans, however, problem loans pegged to the Swiss franc are on the rise. Twice as many housing loans denominated in the Swiss currency are bad loans, compared to loans pegged to the euro.
Loans in kuna value accounted for 18.89% of partially or totally irrecoverable at the end of 2014, 15.72% were loans denominated in euro and 18.35% were loans pegged to the Swiss franc.
HUB notes, however, that the settlement of bad loans through value adjustment and loss provisions had begun to grow due to stricter regulations.
The total settlement rate in Q4 of 2014 was more than 50 per cent due to the growth in corporate loans being settled.