Zagrebačka banka dd
2024 Annual Report
Note: the official European Single Electronic Format of this report is publicly available
Zagrebačka banka dd | |
Contents | |
INTRODUCTION | 3 |
MANAGEMENT BOARD REPORT OF CONDITION | 5 |
BUSINESS DESCRIPTION | 7 |
OPERATING AND FINANCIAL REVIEW | 9 |
OVERVIEW OF THE CROATIAN ECONOMY IN 2024 | 18 |
MANAGEMENT AND CORPORATE GOVERNANCE | 21 |
RESPONSIBILITIES OF THE MANAGEMENT AND SUPERVISORY BOARDS FOR THE | |
PREPARATION AND APPROVAL OF THE ANNUAL FINANCIAL STATEMENTS | 27 |
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS | 28 |
FINANCIAL STATEMENTS | 37 |
Group financial statements | 37 |
Bank financial statements | 42 |
Material accounting policies | 47 |
SUPPLEMENTARY SCHEDULES FOR THE CNB | 238 |
OTHER LEGAL AND REGULATORY REQUIREMENTS | 249 |
OTHER INFORMATION | 250 |
Appendix: SUSTAINABILITY STATEMENT OF ZAGREBAČKA BANKA GROUP |
Zagrebačka banka dd: 2024 Annual Report | 2 |
Introduction
The Management Board of Zagrebačka banka dd presents its Annual Report. It comprises the Management Board's report of condition of the Bank and the Bank's subsidiaries together with Sustainability Statement, an operating and financial review, audited financial statements with an Independent auditors' report, unaudited supplementary reports for the CNB and supplementary financial statements for the Group and the Bank in EUR. The audited financial statements are presented for the Group and the Bank.
Croatian and English language versions
This document comprises the Annual Report of Zagrebačka banka dd for the year ended 31 December 2024 in English language. This report is also published in Croatian language for presentation to shareholders at the Annual General Meeting.
Legal status
The annual financial statements and the Report of Condition are hereby submitted to the Annual General Meeting, as required under the provisions of Article 276, paragraph 3 of the Companies Act, while the Report of the Supervisory Board is submitted to the Annual General Meeting as a separate document.
The annual financial statements have been prepared in accordance with International Financial Reporting Standards and audited in accordance with International Standards on Auditing.
Abbreviations
In this Annual Report, Zagrebačka banka dd is referred to as "the Bank" or "Zagrebačka banka", and Zagrebačka banka dd together with its subsidiaries and associates are referred to collectively as "the Group" or "the Zagrebačka banka Group".
In this Annual Report UniCredit S.p.A., Milano is referred to as "UniCredit" and UniCredit S.p.A. Group is referred to as "UniCredit Group", Bank's and Group's financial statements are somewhere referred to as "unconsolidated and consolidated financial statements".
The Bank's subsidiaries and associates are referred to as follows:
Subsidiaries | Abbreviations |
UniCredit Bank dd, Mostar | UniCredit Bank, Mostar |
ZB Invest doo, Zagreb | ZB Invest |
UniCredit Invest BH doo, Mostar | UniCredit Invest BH, Mostar |
ZANE doo, Zagreb | ZANE |
ZANE BH doo, Sarajevo | ZANE BH, Sarajevo |
UniCredit Leasing Croatia doo, Zagreb | UniCredit Leasing Croatia |
LOCAT CROATIA doo, Zagreb | Locat Croatia |
ZB eplus, open-ended (UCITS) investment fund, Zagreb | ZB eplus |
Associates | Abbreviations |
Allianz ZB doo društvo za upravljanje obveznim i | Allianz ZB, obligatory and voluntary pension funds |
dobrovoljnim mirovinskim fondovima, Zagreb | management company |
Zagrebačka banka dd: 2024 Annual Report | 3 |
Introduction (continued)
Abbreviations (continued)
The central bank, the Croatian National Bank, is referred to as "the CNB".
In this report, the abbreviations "kuna" and "HRK" are used for Croatian kuna. Furthermore, the abbreviations "HRK thousand", "HRK million" or "HRK m", and "HRK bn" or "HRK billion", "EUR thousand", "EUR million" or "EUR m", and "EUR bn" or "EUR billion", "USD thousand", "USD million" or "USD m" and "USD bn" or "USD billion" and "BAM thousand", "BAM million" or "BAM m" and "BAM bn" or "BAM billion" represent thousands, millions and billions of Croatian kuna, Euro, US dollars and Bosnian Convertible Mark, respectively.
Exchange rates
The following exchange rates ruling at 31 December 2024 have been used to translate balances into foreign currency at that date:
USD 1 = EUR 0.95748755 | (31 December 2023: 0.90497738 EUR) |
Zagrebačka banka dd: 2024 Annual Report | 4 |
Management Board Report of Condition
Report of the Management Board on the state of the Bank and the Group
Dear stakeholders of Zagrebačka banka,
the year 2024 was one of the most successful years in our history. Zagrebačka banka Group earned EUR 556 million in net income, which is up by +9.2% compared with 2023. The Group's operating income reached EUR 1,040 million, which represents an increase of 8.4%.
These excellent results reflect consistency in the implementation of the UniCredit Unlocked strategy, our faith in our vision, and the fact that we truly live our values. Our strong presence in the retail and corporate segments is what distinguishes us from others in the market, shows our strength, and confirms that the practice of putting the client at the heart of everything we do brings long-term results.
Zagrebačka banka won the Bank of the Year award, being selected as the best bank in Croatia in 2024 by The Banker, a prestigious international financial magazine, while our Private Banking services were recognised as the best in the country. We also won no less than three Euromoney awards - as the best bank in Croatia in the field of Corporate Banking, Investment Banking and ESG.
The banking sector in general and Zagrebačka banka, as the largest bank, play an important role in Croatia's economic development, in fact a key role at this moment. More specifically, Croatia's historically high credit rating has opened the door to new strategic infrastructure projects and investment opportunities and we, as a bank with long experience in financing, continue to actively support those processes. Hence, every investment that we finance, every innovation that we support and every project that contributes to sustainable development is a reflection of our commitment to be a force that shapes positive changes.
Through cooperation with more than a million clients across Croatia, we increased our market shares and additionally strengthened our position as a leader and innovator in product and service development. We achieved significant progress in terms of digitalisation and simplification of our services and processes, and we supported our clients in further development of their operations through new cooperation initiatives and programmes. We presented numerous novel solutions simplifying our clients' everyday activities and finance management, such as the new m-zaba for corporate users. We also developed and introduced a number of new features in m-zaba for individual users, from the possibility of checking creditworthiness and subsequent splitting of single transactions in the current account into instalments to practical services, such as m-parking and m-redomat. Furthermore, we continued improving the functions performed by Mia, our Contact Centre virtual assistant, and we also simplified and digitalised the housing loan origination process. Finally, we initiated the process of replacing all individual and business Visa debit cards with Mastercard cards which are made from recycled plastic and specially designed to suit the needs of blind and partially sighted cardholders. By doing so, we demonstrate our shared commitment to inclusivity and sustainability, while the benefits that these cards bring clearly show that we always strive to ensure that our clients get the best solutions and have the best user experience.
Through our strong participation in the UniCredit for CEE initiative and cooperation with HAMAG-BICRO, the Croatian Bank for Reconstruction and Development (HBOR) and the Croatian Chamber of Trades and Crafts (HOK), we made a number of financing solutions available to craft/trade businesses and SMEs, thus supporting them in their innovation, competitiveness improvement and business expansion efforts as well as in their efforts to bring breakthrough ideas to the market. In addition, in partnership with the EBRD, the EIB and the EIF, we once again demonstrated our support for client investments in sustainability, innovation and digitalisation. In 2024, we thus became the first partner financial intermediary to join the EBRD on the InvestEU programme, which will enable us to financially support our clients' green projects in the coming years thanks to a facility worth EUR 100 million.
Zagrebačka banka dd: 2024 Annual Report | 5 |
Management Board Report of Condition (continued)
Report of the Management Board on the state of the Bank and the Group (continued)
In addition to achieving business success, we also always focus on strengthening our role in the community. We therefore continued to support important projects that strengthen our society and contribute to progress through various sponsorships, donations and volunteer work.
We owe our success primarily to our dedicated employees, and we continually invest in their well-being. With that in mind, a new collective agreement was signed at the end of the year, bringing a number of new employee benefits, while preserving the rights granted under the former agreement. We are particularly proud that, thanks to important initiatives implemented with the aim of empowering employees and increasing their satisfaction, we received the Best Employer Brand in the Banking Sector award. We also hold the Family Friendly Employer of the Year title, which bears witness to our continued efforts to secure a healthy work-life balance for our employees and opportunities for their personal and professional growth.
We look ahead to 2025 with optimism and self-confidence. We will continue to be a strong source of support for our clients, an unwavering partner and driver of the economy as well as a responsible contributor to creating positive social changes and sustainable values.
I would like to express my gratitude to all our clients for their confidence and cooperation, as well as to our dedicated employees without whose efforts and commitment these excellent results would not have been possible.
Dalibor Ćubela
Chief Executive Officer
Chairman of the Management Board
Zagrebačka banka dd: 2024 Annual Report | 6 |
Business description
Zagrebačka banka dd is a licensed bank operating in the Republic of Croatia and the holding company for the Zagrebačka banka Group.
The Zagrebačka banka Group is a financial services group which provides a range of corporate and retail banking services for customers in the Republic of Croatia and the Bosnia and Herzegovina, Federation of Bosnia and Herzegovina. The Group serves around 99,500 active corporate clients and small businesses and approximately 1.4 million active retail clients.
The Bank provides a full range of banking services, including corporate, retail banking, international financing, investment banking and corporate finance services.
Subsidiaries and associates
The Bank's subsidiaries and associated companies as at 31 December 2024 and during 2024 are presented below:
Fully consolidated subsidiaries
Company | Address | Country of | Industry | Group | Group | |
domicile | ownership | ownership | ||||
as at 31 | as at 31 | |||||
December 2024 | December 2023 | |||||
Bosnia and | ||||||
Herzegovina, | ||||||
Federation of | ||||||
UniCredit Bank dd, | Kardinala Stepinca bb | Bosnia and | 99.3% | 99.3% | ||
Mostar | 88000 | Mostar | Herzegovina | Banking | ||
UniCredit Leasing | Samoborska cesta 145 | Republic of | 100.0% | 100.0% | ||
Croatia doo | 10000 | Zagreb | Croatia | Leasing | ||
Damira Tomljanovića | ||||||
LOCAT CROATIA | Gavrana 17 | Republic of | Real estate | 100.0% | 100.0% | |
doo1 | 10000 | Zagreb | Croatia | business | ||
Samoborska cesta 145 | Republic of | Fund | 100.0% | 100.0% | ||
ZB Invest doo* | 10000 | Zagreb | Croatia | management | ||
Bosnia and | ||||||
Herzegovina, | ||||||
Federation of | ||||||
UniCredit Invest BH | Kardinala Stepinca bb | Bosnia and | Fund | 99.64% | - | |
doo* | 88000 | Mostar | Herzegovina | management | ||
Nova Ves 17 | Republic of | Real estate | 100.0% | 100.0% | ||
ZANE doo* | 10000 | Zagreb | Croatia | agency | ||
Bosnia and | ||||||
Herzegovina, | ||||||
Branilaca Sarajeva 20 | Federation of | Real estate | ||||
Bosnia and | 100.0% | 100.0% | ||||
ZANE BH doo* | 71000 | Sarajevo | Herzegovina | agency | ||
Augusta Cesarca 2 | Republic of | Insurance | - | 100.0% | ||
ZABA Partner doo2* | 10000 | Zagreb | Croatia | broker | ||
ZB eplus, open- | ||||||
ended (UCITS) | Samoborska cesta 145 | Republic of | Fund | 100.0% | ||
investment fund | 10000 | Zagreb | Croatia | management | 100.0% | |
- Due to the immateriality from Zagrebačka banka Group perspective, the Bank's subsidiary Locat Croatia doo was excluded from the consolidation perimeter starting from March 2023. For details please refer to Note 21.
- Due to the immateriality from Zagrebačka banka Group perspective, excluded from the consolidation perimeter. For details please refer to Note 21.
- On November 20th, 2024 the company ZABA Partner d.o.o. was merged to the Zagrebačka banka d.d.
Zagrebačka banka dd: 2024 Annual Report | 7 |
Business description (continued)
Equity accounted associated companies
Company | Address | Country of | Industry | Group | Group |
domicile | ownership as | ownership as | |||
at 31 December | at 31 December | ||||
2024 | 2023 | ||||
Allianz ZB doo društvo za | |||||
upravljanje obveznim i | Obligatory and voluntary | ||||
dobrovoljnim mirovinskim | Heinzelova 70 | Republic of | pension | ||
fondovima | 10000 Zagreb | Croatia | fund management | 49.0% | 49.0% |
Branch network
Zagrebačka banka Group - number of branches (end of year) | 2024 | 2023 |
Republic of Croatia | 101 | 100 |
Bosnia and Herzegovina, Federation of Bosnia and Herzegovina | 69 | 69 |
Total | 170 | 169 |
Zagrebačka banka dd: 2024 Annual Report | 8 |
Independent Auditors' report to the shareholders of Zagrebačka banka d.d. (continued)
Operating and financial review
Operating results of Zagrebačka banka dd
In 2024 Zagrebačka banka dd realised profit after tax of EUR 450 million, at the same level as in 2023.
Return on asset (ROA) of the Bank amounts to 2.13% (2023: 2.21%).
Operating income amounted to EUR 809 million, increased by EUR 22 million (+2.8%) Y/Y:
- Net interest income amounted to EUR 588 million, increased by EUR 11 million (+1.9%) Y/Y.
- Net fee and commission income amounted to EUR 174 million, increased by EUR 8 million (+4.8%).
- Net trading and other income and expenses amounted to EUR 47 million, increased by EUR 3 million (+6.8%) Y/Y, mainly due to lower dividend income and trading result.
Operating expenses - at EUR 247 million, higher by EUR 12 million (+5.1%). Cost to income ratio equals to 30.53%.
Profit before impairment and other provisions amounted to EUR 557 million, increased by EUR 13 million (+2.4%) Y/Y, as a result of the previously described movements in Operating income and Operating expenses.
Impairment and other provisions amounted EUR 13 million, increased by EUR 14 million.
The Bank's assets and liabilities
Total assets of the Bank amounted to EUR 21,171 million, up by EUR 798 million (+3.9%) BoY.
- Net loans and advances to customers amounted to EUR 10,926 million, increased by EUR 641 million (+6.2%) due to increase in retail lending.
- Deposits from customers represent primary source of funding. They amounted to EUR 17,468 million, increased by EUR 424 million (+2.5%) realized in retail and corporate segment.
- Deposits from credit institutions at EUR 135 million, lowered by EUR 71 million (-34.5%) BoY.
Equity and reserves - at EUR 2,349 million. The capital adequacy ratio - at 25.01% according to preliminary unaudited data which do not include 2024 result (31 December 2023: 25.77%).
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Operating and financial review (continued)
Operating results of Zagrebačka banka dd (continued)
The Bank's assets and liabilities (continued)
The structure of the Bank's assets
For the purpose of the analysis, assets are broken down into four categories; their relative shares and trends in comparison to the previous year:
EUR million | % | EUR million | % | ||||
2024 | 2024 | 2023 | 2023 | ||||
Loans and advances to customers | 12,499 | 59.0% | 11,745 | 57.6% | |||
Structural and liquidity management | |||||||
assets | 8,087 | 38.2% | 8,045 | 39.5% | |||
Investments in subsidiaries and | |||||||
associates | 266 | 1.3% | 284 | 1.4% | |||
Other assets | 319 | 1.5% | 299 | 1.5% | |||
Total assets | 21,171 | 100.0% | 20,373 | 100.0% | |||
The Bank's assets - comparison to the previous year (in EUR million)
Zagrebačka banka dd: 2024 Annual Report | 10 |