Photograph: HINA/ Damir SENČAR /ds

 The latest data from the Croatian National Bank (HNB) shows that at the end of October 2015 foreign currency deposits in commercial banks in Croatia were 5.4% higher than in October 2014, totalling HRK 257.2 billion. Raiffeisenbank Austria (RBA) analysts expect deposits to continue growing, spurred by household saving.

Total deposits - deposit money and time and savings deposits in kuna and foreign currencies - in October this year amounted to HRK 13.2 billion or 5.4% higher than in October 2014, while on the monthly level they rose HRK 1.1 billion or 0.4%. Compared to the end of 2014, total deposits were HRK 12.9 billion or 5.3% up.

"The strong annual growth of 3.4% is the result of an increase in both kuna and foreign currency deposits," the RBA analysts said. 

Kuna deposits at the end of October totalled HRK 35.8 billion, a drop of HRK 170.3 million or 0.5% on the month. Despite the monthly drop, on the year they grew HRK 733.8 million or 2.1%. On the other hand, deposits in foreign currencies reached HRK 172.7 billion, up by HRK 925 million or 0.5% on the month and by HRK 6.2 billion or 3.7% on the year, the RBA analysts said.

"The strong annual growth of foreign currency deposits was also owing to the conclusion of an agreement on the sale of the TDR tobacco factory, owned by Adris Grupa, to British American Tobacco at the end of September," the RBA anlysts said, noting that the transaction totalled around HRK 3.84 billion and that its effect was likely to be felt in the coming period as well.

Foreign currency deposits account for close to 83% of all savings and time deposits.

At the end of October deposit money totalled HRK 48.65 billion, 342.3 million or 0.7% less than in September, and HRK 6.2 billion or 14.7% more than in October 2014. This shows that the inclination by Croatians to hold liquid financial assets in current and transaction accounts has continued, which is partly a result of a drop in bank interest rates on deposits and of the introduction of taxes on savings deposits at the start of this year, the analysts said.

Broken down by sector, an annual drop in deposits was reported only in the category "Other financial intermediaries", where deposits at the end of October totalled HRK 2.5 billion, down HRK 340.3 million or 12.1%.

Household deposits, which account for more than 80% of all deposits, totalled HRK 167.6 billion and stagnated at last year's level, but they dropped by HRK 113 million or 0.1% on the month.

Corporate deposits at the end of October were HRK 31.8 billion, an annual increase of HRK 6.6 billion or 26%. On the month they increased HRK 1.2 billion or 4%.

The RBA analysts expect the positive annual deposit growth rates to continue, spurred by the growth of household deposits.

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