Corporate lending in Croatia surpassed 87 billion kuna (€11.5 billion) at the end of February 2021, increasing nominally by 3.3 billion kuna or 4 percent from February 2020 and continuing to increase for the 12th consecutive month, shows an analysis by Raiffeisen Bank (RBA) released on Wednesday.

Compared to January, loans to non-financial companies increased in February by 0.3 percent.

The increase is entirely the result of a growth in foreign currency loans which accounted for 63 percent of corporate lending. With a month-on-month increase of 0.5 percent, foreign currency-denominated corporate loans amounted to 54.9 billion kuna, which is 3.5 billion kuna or 6.8 percent more year-on-year, RBA analysts said in their analysis of data released by the central bank HNB

RBA notes that the weakening of the kuna against the euro resulted in the kuna amount of foreign currency-denominated loans going up by 1.7 percent on the year and 0.3 percent on the month. RBA analysts noted that after a relatively strong growth in kuna household loans in January, a mild drop of 0.1 percent was registered at the end of February to 32.2 billion kuna.

The annual increase in loans is the result of an increase in investment and working capital loans. Despite going down for the fourth consecutive month, by  0.2 percent to 36 billion kuna, investment loans at the end of February were 1.4 billion kuna higher on the year.

On the other hand, loans for working capital continued to grow, with a monthly increase of 0.8 percent to more than 30 billion kuna, which is 905 million kuna more year-on-year.

“We expect a stronger growth in investment loans in the second quarter and in particular after the pandemic and uncertainty subside,” the analysts said.