February 2 (SeeNews) - Lending by Croatian banks declined by 5.8% on the year to 258.5 billion kuna ($37.5 billion/34.7 billion euro) as of end-December, continuing a downward trend begun in November 2012, the local unit of Raiffeisen Bank International said on Thursday.
The annual drop in lending is largely owed to a nominal decline in lending caused by the conversion and partial write-off of loans denominated in Swiss francs, Raiffeisenbank Austria Zagreb (RBA) said in a daily report.
"From November 2015 to December last year, Croatian banks wrote off a total of 6 billion kuna in loans, while the nominal fall in lending was also supported by the sale of bad loans," RBA explained citing data from the Croatian central bank.
On a monthly comparison basis, lending decreased by 2.3 billion kuna, or 0.9%, in December.
In December, 65% of total loans were denominated in foreign currency.
"The annual decline in loans denominated in kuna is partially supported by the strengthening of the domestic currency against the euro and Swiss franc", RBA said. The lender concluded that loans denominated in kuna should grow this year, boosting the overall lending of Croatian banks.
(1 euro=7.45810 kuna)