How Do I Get Paid (Methods of Payment)
With most of the Croatian imports coming from long-term suppliers, it is common for exporters to provide supplier credits of up to three months to Croatian buyers. Although there weren’t many reported incidents of fraud or payment evasion, it is recomm
How Does the Banking System Operate
At the end of 2007, the Croatian banking system consisted of 33 commercial banks and 5 housing savings banks. At the end of September 2007 (last available data), total assets of the 33 commercial banks were HRK 327,2 billion, up 9.35 percent compared to the end of 2006.
Croatian banks ended the first three quarters of 2007 (September 30, 2007) with an income of HRK 3.8 billion (before tax), 22 percent higher than in the same period last year. Only three smaller banks, representing mere 0.51 percent of all banking assets, suffered a loss. Thus, the average return on assets at the end of 3Q 2007 was 1.13 percent – a figure that usually hovered around 1.6 percent in the last couple of years. The efficiency continued to increase, as witnessed by a ratio of assets per employee, which reached HRK 16.1 million.
During the first nine months of 2007, lending to citizens increased by almost 17 percent, from HRK 95.6 billion at the end of 2006 to HRK 109.7 billion on September 30, 2007. Corporate lending recorded a 6.35 percent growth in the same period, reaching HRK 88.7billion. Exposure towards the citizens approximately matches the level of private deposits in the Croatian banks. Retail banking is still the most developed market segment, with 1151 branch offices and 2566 ATMs. This will hardly change anytime soon, judging by the number of credit and debit cards in Croatia – a country of 4.3 million has more than 8.5 million cards, of which 51.6 percent are issued by MasterCard, 36.4 by VISA and 11.9 percent by credit card companies (Diners, AmEx). During the first half of 2007, the total value of 86.6 million transactions performed by credit and debit cards exceeded HRK 39 billion, up 19.3 percent compared to the same period last year.
Zagrebacka banka (owned by Unicredit Group) and Privredna banka (owned by Intesa Sanpaolo group and the EBRD) still have a noticeable lead over the rest of the banks, jointly holding approximately 40 percent of total bank assets in Croatia.
The number of housing savings banks remained the same (5), as well as their participation in the total banks’ assets in Croatia (1.9 percent).
Foreign-Exchange Controls
Croatia's currency, the kuna (HRK), floats freely, but the Croatian National Bank intervenes in the market from time-to-time to ensure stability of the currency, effectively ensuring the crawling peg (to the Euro) performance, disrupted by the seasonal impacts of tourism revenues and irregular privatization receipts.
U.S. Banks and Local Correspondent Banks
A list of all licensed banks and representative offices is available at http://www.hnb.hr/supervizija/esupervizija.htm.
Project Financing
Most project sponsors expect project financing from the international financial institutions – the EBRD, World Bank, DEG and EIB – as local banks are reluctant to borrow against future revenues of a newly established entity. This approach, “equity lending” has in the past represented a serious obstacle to growth and indirectly caused two banking crises in Croatia (in 1998 and 1999). Therefore, project financing in Croatia is rare and usually requires a guarantee from a project sponsor.
Web Resources
Export-Import Bank of the United States: http://www.exim.gov
Country Limitation Schedule: http://www.exim.gov/tools/country/country_limits.html
OPIC: http://www.opic.gov
Trade and Development Agency: http://www.tda.gov/
SBA's Office of International Trade: http://www.sba.gov/oit/
USDA Commodity Credit Corporation: http://www.fsa.usda.gov/ccc/default.htm
U.S. Agency for International Development: http://www.usaid.gov
The World Bank Group: http://www.worldbank.org/
European Bank for Reconstruction and Development: http://www.ebrd.org/