The total amount of bank lending in Croatia at the end of August was HRK 278.5 billion, which was a decrease both on the monthly and the annual level, according to the latest figures released by the Croatian National Bank (HNB).

The total amount of bank lending in August 2015 was lower by HRK 3 billion or 1.1% than in July 2015, while in comparison with August 2014 it was lower by HRK 1.7 billion or 0.6%.

Given that 73% of loans were granted in or tied to a foreign currency, the appreciation of the kuna against the euro by 1.1% on the annual level and by 0.6% on the monthly level statistically increased the drop in the amount of lending as given in kuna, analysts at Raiffeisenbank Austria (RBA) said on Wednesday.

On the annual level, the decline in the amount of lending was due to a fall in foreign currency loans, including kuna loans denominated in foreign currency. These loans amounted to HRK 202. 2 billion at the end of August and were lower by HRK 3.2 billion or 1.6% than in July. Compared with August 2014, they were down by 1.6% or HRK 3.3 billion.

Loans denominated solely in the domestic currency, the kuna, amounted to HRK 76.3 billion, which was an increase of HRK 218.3 million or 0.3% compared with July 2015 and of HRK 1.5 billion or 2.1% in relation to August 2014.

The figures also showed further deleveraging of non-financial companies and households, while the government sector recorded an annual increase in borrowing, the RBA analysts said.

Loans to the central government sector amounted to HRK 53.7 billion in August, accounting for 19.3% of the total lending. Although their amount fell by HRK 487.6 million or 0.9% month on month, it increased on the annual level by HRK 2.7 billion or 5.4%.

Loans to non-financial companies totalled HRK 89.6 billion, which was a decrease of HRK 1.3 billion or 1.4% compared with July 2015 and of HRK 3.6 billion or 3.9% compared with August 2014.

Household lending fell to HRK 25.5 billion in August, recording a monthly and annual decrease of HRK 1.3 billion or 1%. Compared with December 2014, households loans were lower by HRK 908 million or 0.7%, confirming the continuation of negative trends in household lending, which accounts for 45% of the total lending, the RBA analysts said.

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