Total deposits held by commercial banks in Croatia stood at 383.3 billion kuna (€51 billion) at the end of June 2022, 3.4 percent up from May, and 12.3 percent up year-on-year, state news agency said on Thursday, citing publicly available data released by the central bank HNB.

Total deposits, including demand deposits, savings and time deposits, increased by 18.06 billion kuna, or 4.9 percent, since the end of 2021.

The increase in total deposits is primarily the result of the increase in demand deposits, which include money in transaction accounts and banks’ obligations arising from kuna payment instruments issued, minus the amount of money in payment transactions, analysts at Raiffeisenbank Austria (RBA) said in their comment on the report.

At the end of June 2022, demand deposits reached 162.9 billion kuna, accounting for 42% of all deposits. Demand deposits increased by 6.5% compared with the end of 2021, by 17.4% compared with June 2021 and by 3.4% compared with May 2022.

Two-digit growth rates for demand deposits, registered since the end of the second quarter of 2013, are the result of low passive interest rates on time deposits and a relative disinclination to invest in alternative financial instruments, RBA said.

A greater inflow of this type of deposits can be expected at the end of the year for conversion purposes as Croatia switches to euro on 1 January 2023, it added.

Total savings and time deposits reached 220.9 billion kuna in nominal terms, increasing by 3.2% from May 2022, by 8.8% from June 2021 and by 3.8% from the end of 2021.

Savings and time deposits denominated in the national currency, the kuna, fell by 3.8 billion kuna or 11.7% year on year, while foreign currency-denominated deposits accounted for 87% of total savings and time deposits, increasing by nearly 3 billion kuna or 12.7% compared with June 2021.

Households accounted for 77.9% of total foreign currency-denominated savings and time deposits.

(€1 = 7.51 kuna)