"Broken down by sector, the bulk of the increase comes from non-financial companies. The trend of high growth rates of deposit money, which in almost all cases are two-digit, has been going on since March 2013," analysts at Raiffeisenbank Austria (RBA) said in a comment on the HNB data on Wednesday.
Commercial bank deposits include deposit money and savings and fixed-term deposits. The deposit money amounted to HRK 64.2 billion at the end of June.
RBA says that the increase in deposit money is the result of economic recovery and the inclination of domestic sectors to hold more liquid financial assets at a time of decreasing interest rates on savings and fixed-term deposits.
"On the other hand, the decline in interest rates on deposits is a direct consequence of very high liquidity for years which has caused a decline in interest rates on placements. This is a characteristic not only of the Croatian financial market, but is also a reflection of the global environment," RBA analysts said.
After five months, June saw an end to comparatively strong monthly declines in savings and fixed-term deposits, which were predominantly driven by declines in foreign currency deposits.
For the first time in four months, total savings and fixed-term deposits recorded a modest monthly increase, of 0.2% or HRK 485 million to HRK 197.1 billion. However, they fell for the ninth consecutive month year on year, by 2.4%.
"The decline was additionally fuelled by the strengthening of the kuna against the euro, by 1.4% in June compared with June last year, given that in the structure of these deposits foreign currency deposits, mostly denominated in euros, prevail," RBA said.
At the end of the second quarter of the year, foreign currency deposits amounted to HRK 162.3 billion, of which HRK 134 billion accounted for the household sector. Foreign currency savings and fixed-term deposits made up 82% of the savings and time deposits.
Kuna savings and fixed-term deposits totalled HRK 34.8 billion at the end of June, up 0.1% over the previous month and down 2.4% over June 2016.
(EUR 1 = HRK 7.4)