Addressing the launch of the "Financial Industry in 2009" edition of Croatia's Privredni Vjesnik business magazine in Zagreb on Tuesday, Primorac called on banks to make their loans to the economy cheaper.
Commenting on the latest borrowing of the Croatian government, Primorac said that this was a result of the state budget deficit which he said should be treated as a problem, as the state was slow and not resolute in reducing the high public spending.
It is not a problem when the state draws many funds from the domestic market as banks are not illiquid, but the problem lies in the fact that banks will slowly grant loans to the economy, which slowly applies for loans due to high interest rates. Consequently, and owing to many other reasons, Croatia has been slower in its recovery from the crisis than other countries such as Bulgaria, Romania or Hungary, although objectively Croatia is in a much better situation than they are, Primorac said.
He warned about a rise of non-performing loans from 7.6 percent in 2009 to a possible 9 percent this year.
Analyst Velimir Sonje said that despite the banking system's resilience to the crisis, credit stagnation was still present due to contracted supply and demand.
According to the publication, Croatia's financial industry was worth approximately HRK 500 billion in 2009, with the banking sector accounting for 75.4 percent of that amount.
Leasing companies made up nearly 7 percent, pension funds slightly over 6 percent, insurance companies accounted for 5.7 percent, investment funds for 2.8 percent, savings banks for 1.3 percent and the rest for 1.8 percent.
Last year, banks' loans totalled HRK 258.2 billion, rising two percent on the year.
Loans approved in the retail sector dropped by 2.25 percent, corporate loans increased slightly, while loans approved to the state jumped by 23.4 percent.
The banks in Croatia made a profit of HRK 3.3 billion, dropping by 28.4 percent from 2008.
In 2009, Zagrebacka Banka retained the largest share on the market with 23.2 percent and was followed by Privredna Banka (PBZ) with a 17.8-percent share. Erste Bank finished third with a share of 11.8 percent.
The top three insurance companies were Croatia Osiguranje, Euroherc and Allianz Zagreb.
(EUR 1 = HRK 7.213282)