The Croatian National Bank (HNB) said on Monday that it ranked among Europe's economical central banks which at the same time operated successfully, although this was not its main task, and that its work was subject to a strict audit.

Asked by Hina to comment on recent objections about the economy and costs of its work, the HNB said it had below-average operating costs and above-average profits in the European Union.

Although profit is not the objective of central banks' activity, the HNB's is among the highest if compared to its assets or to GDP, and in 2014 the HNB generated a profit of 0.8 percent of GDP, with only the central banks of the Czech Republic, Ireland and Cyprus posting higher profits, the HNB said.

The HNB's operating costs are 0.09% of GDP and if compared to countries with a relatively similar population, such as Latvia (0.15% of GDP), Bulgaria (0.12%), Ireland and Lithuania (0.11%), Austria and Slovakia (0.1%), Hungary (0.09%) and Slovenia (0.08%), it is evident that the HNB ranks among the more economical central banks, the bank said.

If one looks at the absolute operating cost per employee, among the comparable countries, only Bulgaria's central bank has lower costs than the HNB, while the HNB's costs are similar to those in Romania and the Czech Republic, and lower than in Hungary and Poland, the bank said.

Regarding demands that the State Audit Office inspect the its operations, the HNB recalled that under a 2001 law the bank was independent and that it was audited by an external auditor approved by the parliamentary finance committee. The HNB added that parliament had all the information and instruments to request audit reports if it deemed it necessary.

The bank said that for additional transparency, it had set up an external audit committee to assess the work of the independent external auditor. A State Audit Office inspection would contribute to higher transparency if it were to assess if Croatia has an efficient, economical and effective central bank based on its operating costs, the HNB said.

The HNB went on to say that it was not financed from the government budget but revenues generated from activities defined by law, including international reserves management, bank supervision and money issue, and that it earned enough to cover operating costs and transfers to the Finance Ministry in conditions of historically lowest interest rates and negative euro rates.

It does that through good finance management, notably by buying long term securities since 2011, which extended portfolio maturity and resulted in a HRK 1.8 billion revenue increase in the 2012-15 period, all of which was transferred to the Finance Ministry, the HNB said. It added that since 2012 decisions were made to increase the same portfolio and extend its maturity, thereby ensuring stable revenues in the years from 2016 onwards.

(EUR 1 = HRK 7.56)

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