Total deposits with commercial banks in Croatia at the end of August totalled HRK 322.7 billion, an increase both on the month and on the year, show the latest data from the central bank.

Compared to July, deposits rose by HRK 3.2 billion or 1% while year-on-year they grew by HRK 19.8 billion, an increase of 6.5%. In July, deposits grew by 8.1% year-on-year and they have been growing constantly since 2011.

The continuation of the monthly growth of total deposits, which consist of demand deposits and savings and term deposits, is a result of an even contribution of demand deposits and savings and term deposits, while the annual growth is primarily owing to the growth of demand deposits, which include money in transaction accounts and banks’ obligations arising from kuna payment instruments issued.

At the end of August, demand deposits grew on the month by 1.3% to 120.4 billion kuna, a share of 37.3% in total deposits. Demand deposits thus continued growing at two-digit annual rates, with minor oscillations. Compared to August 2019, they grew by 17.5% or HRK 17.9 billion.

Analysts at Raiffeisenbank Austria (RBA) believe the trends are a result of low interest rates on term deposits, which results in redirecting surplus available income to highly liquid types of deposits.

Total savings and term deposits in the national and foreign currencies grew on the month by HRK 1.7 billion or 0.8% and in August they continued growing for the seventh consecutive month also on the annual level, by HRK 1.9 billion or 1%, totalling around HRK 202.3 billion at the end of August.

More than 85% of savings and term deposits at the end of July were in a foreign currency, predominantly euros, and those savings were mostly generated by households.

Total currency deposits at the end of August amoounted to HRK 2.6 billion, 1.5% up from in July. Year-on-year they grew by 6.5 billion or 3.9%.

RBA analysts note that a possible reduction of households’ future available income and problems in the real sector could slow down the growth of total bank deposits. Nontheless they expect demand deposits to continue growing the most due to low interest rates, a high inclination to keep liquid assets and a disinclination to invest in other financial assets.

(€1= HRK 7.562052)