Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
Number 702, September 21, 2020
Quality of exposures stable for the time being ................................. .1
Weekly overview ............................................................................... 2
Statistics ........................................................................................... 3
Quality of exposures stable for the time being
The central bank’s data on the movements of non-
performing exposures of banks indicate that their share
at the end of the second quarter was only sligthly above
the share recorded in March (+0.1 p.p.) amounting to
5.5%, resulting from a 0.2 p.p. higher share in non-
financial companies (at 13.2%) accompanied by a
somewhat more explicit increase of 0.7 p.p. in the
household portfolio (to 6.5%). The latter was mostly
induced by a deterioration of the quality of cash loans
(+1.2 p.p. to 6.7% ), which was expected since these loans have for several quarters been recording a negative
trend, as well as due to the fact that a considerable share of these loans was placed without collaterals.
Simultaneously the growth of share in housing loans amounted to a moderate 0.3 p.p. (at 4.1%), and in
overdrafts 0.6 p.p. (at 6.2%). Breakdown of non-performing exposures to non-financial companies by activity
indicates that the quality of placements has noticeably deteriorated in manufacturing that registered a leap in
the share of 0.9 p.p. to 19.0%, amid unfavourable trends that have been encountered in the said industry for
quite some time and a particularly sharp blow sustained by manufacturing during lockdown. In terms of level
of the share of 24.2% construction that generated an increase of 0.5 p.p. is still at the forefront, and not at all
surprisingly, due to a drastically weaker tourist pre-season and a thinner tourist season, the growth of share is
persistent also in accommodation and food service activities (+0.5 p.p. to 7.0%). Trade simultaneously
recorded a slight decline of share 0.1 p.p. to 10.8%. Sale of receivables in the second quarter amounted to a
negligible 60 million kuna approximately, which almost fully refers to receivables from non-financial companies.
While the indicator of total share of NPEs is stable for the time being, deteriorated economic develoments and
their expected unfavourable effect on the portfolio quality generated a profound negative impact on operations
of credit institutions over this year’s first six months (notably in the second quarter). Interest income in the first
half of the year was thus reduced by 5.7% compared with the same period last year, fee and commission
income by 10.8%, dividend income was about ten times lower, and exchange rate loss soared by around 170
million kuna. Gross operating income thus dropped by 11.4%, which in addition to a mildly 2.8% lower
operating costs, resulted in a reduction of the net operating income by 20.0%, to 3.3 billion kuna. As impairment
costs recorded a four-fold rise reaching 1.3 billion kuna, net profit in the first half of the year plummeted by
47.9% yoy.
Predicting as to what awaits us until the end of the year is always ungrateful, and especially while facing large
uncertanties, when the movements of a considerable number of variables may unfold unexpectedly. However,
based on the July monetary statistics showing steady growth rates of loans to the private sector and data on
moratoria revealing a substantial share of ‘frozen’ placements, it is already apparent that a sharper growth of
non-performing exposures was only postponed owing to the moratoria (especially in the case of non-financial
companies), while a continuation of rising impairment costs in the second half of the year is quite certain, but
the growth rate might still decelerate amid a gradual economic upturn and the tourist season that exceeded
expectations, and extension of individual measures and subsidies.
Weekly overview
• In August the Consumer Price Index dropped by 0.1% yoy, primarily due to 5.2% lower prices in Transport
(of which fuels and lubricants for personal transport equipment -9.5%). Over this year's first eight months
consumer prices posted an average increase of 0.3% yoy.
• The credit rating agency Standard & Poor's (S&P) on Friday confirmed the investment level of credit rating
for Croatia (BBB- with stable outlook), judging that this year's economic downturn will amount to 8%, while
the growth in 2021 might amount to 5.6%.
• We observed a quiet week behind us with small EUR/HRK trading volumes and a stable exchange rate
around 7.54. Kuna weakened against the euro by 0.1% wow, hence on Friday the exchange rate
amounted to 7.5373 kuna to the euro, while against the dollar it weakened by 0.3% to 6.3606 kuna to the
dollar. This week we do not expect any major changes.
• Last week excess liquidity was maintained at around 42 billion kuna, interest rates continued to stagnate,
and there were no placements at the CNB's regular repo auction.
• The Crobex Indeks closed on Friday at 1,612.09 points, up by 0.1% wow, while Crobis closed the week
at 112.20 points, resulting almost unchanged in wow terms. As concerns sector indices, CROBEXtourist
posted an increase of 1.1% yoy (to 2,968.33 points), and CROBEXindustry of 1.2% (to 882.17 points),
while CROBEXconstruct fell by 5.2% (to 724.11 points). Last week the total ZSE turnover reached 89.7
million kuna, down by 67.0% wow, amid a 70.2% lower turnover in bonds (of 70.9 million kuna) and 45.5%
lower turnover in shares (of 18.8 million kuna).
Statistics
RESEARCH OFFICE
Ivana Jović
Ana Lokin
Ivan Odrčić
TREASURY
Eugen Bulat
LEGAL DISCLAIMER
This publication is issued by PRIVREDNA BANKA ZAGREB-DIONIČKO DRUŠTVO, Zagreb, Radnička 50 (hereinafter:
PBZ) and aimed at clients of the PBZ Group. This publication is intended for information purposes only and may not in
any way be considered an offer or invitation to purchase any property or rights mentioned in it. The informative nature
of this publication means that it may not serve as a substitute for the personal judgment and assessment of any reader
or anyone who receives this publication. The information, opinions, analyses, conclusions, forecasts and projections
given here are founded on publicly available data whose accuracy PBZ relies on, but cannot guarantee. Accordingly,
all the opinions, attitudes, conclusions, forecasts and projections given in this publication are subject to changes, which
depend on changes to the data as published by the source used. PBZ allows further utilization of the data given in this
publication on the condition that the publication is indicated as the source. All the property mentioned in this publication
and whose movement is the subject of comment may from time to time be the subject of trade or positions taken by
PBZ.