• CNB Governor Boris Vujčić gave a lecture at the ‘Financial Market’ conference on current trends and risks in the Croatian banking sector.
  • Vujčić stated that the banking system is recording record profitability and the lowest level of non-performing loans, but cyclical risks are accumulating.
  • Capital buffers are declining due to faster asset growth and profit distributions, and Croatia has fallen below the EU average in this regard.
  • The credit cycle is accelerating, with lending directed to sectors whose revenues strongly fluctuate with the economic cycle, such as construction.
  • The CNB is pursuing a proactive macroprudential policy, but the banking sector must strengthen resilience while possible.
  • Vujčić warned of renewed accumulation of macroeconomic imbalances and a high house price-to-income ratio.

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