Gov't has no objections on central bank's work in 2012

The Croatian government on Thursday adopted an opinion with no objections regarding the annual report on the performance of the Croatian National Bank (HNB) in 2012, which was already submitted by the central bank to the parliament.

Finance Minister Slavko Linic recalled that last year, the HNB recorded a net profit of HRK 475.8 million, which was a lower profit in comparison to the previous year due to unfavourable trends in exchange rates.

During the debate on the HNB report for 2012, Linic recalled that public debt had grown by 21.5% to HRK 177.4 billion in 2012, which he described as proof that the previous government whose term expired in late 2011, "left many unclean papers behind".

The public debt is so high that it cannot be covered by tax revenues, the minister said.

Last year was marked by a 2.5% decrease in bank lending to companies and a 1.6% contraction in lending to the retail sector due to high interest rates and a low credit score of applicants, according to Linic.

Non-performing loans reached 13.8% rate which is perceived by the minister as a risk for the banking system, but he did not deem it as a threat to the stability of the banking system thanks to the good capital adequacy rate.

However, all of this affected commercial banks' profit which shrank by 25% in 2012, and consequently had an impact on the state budget, Linic added.

(Hina)



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