Comparative analysis of financial soundness and performance of operations of large and small banks in the Republic of Croatia

Dostupnom literaturom jasno je nekoliko činjenica: male banke imaju niz prednosti u odnosu na velike banke kao što su jednostavnija organizacija, bolje poznavanje lokalnog tržišta i lokalno smještena centrala banke te jednostavnije upravljanje kreditnim rizikom. Velike banke, s druge strane, imaju prednosti, koje su ujedno nedostaci malih banaka, poput pristupa jeftinijim izvorima financiranja, bolje mogućnosti diverzifikacije, bolje percipiranje i korištenje tehnoloških promjena, širi spektar proizvoda, djelotvornije upravljanje rizicima i bolja prilagodba regulatornim zahtjevima. Potencijal za dodatno istraživanje jest usporedba sigurnosti i uspješnosti poslovanja velikih i malih banaka na konkretnim primjerima u Republici Hrvatskoj u razdoblju poslije globalne financijske krize 2008. Prikazano je opće stanje hrvatskog bankovnog sustava u razdoblju 2016.-2020. godine upotrebom relevantnih pokazatelja te je jasno da se broj banaka u kratkom razdoblju osjetno smanjio što je posljedično utjecalo na porast koncentracije bankovnog tržišta pa je udio pet najvećih banaka porastao na 81,4% ukupne imovine hrvatskog bankovnog sustava. Pokazatelji rentabilnosti dosegli su pretkrizne razine, no u 2020. se dobit banaka prepolovila i banke su povećale rezerviranja za očekivane gubitke koji reflektiraju potencijalno povećanje kreditnog rizika zbog pandemije. U kontekstu financijskih pokazatelja, velike banke su u prosjeku poslovale sigurnije i uspješnije od malih banaka u promatranom razdoblju.Several facts are clear from the available literature: small banks have a number of advantages over large banks such as simpler organization, better knowledge of the local market and locally centered bank headquarters, and simpler credit risk management. Large banks, on the other hand, have advantages, which are also disadvantages of small banks, such as access to more affordable financing, better opportunities for diversification, better perception and use of technological change, a wider range of products, more effective risk management and better adaptation to regulatory requirements. The potential for additional research is to compare the safety and performance of large and small banks on specific examples in the Republic of Croatia in the period after the global financial crisis in 2008. The general state of the Croatian banking system in the period 2016.-2020. is presented using relevant indicators and it is clear that the number of banks decreased significantly in a short period of time, which consequently affected the increase in the concentration of the banking market and resulted in the share of the five largest banks increasing to 81.4% of consolidated assets of Croatian banks. Profitability indicators reached pre-crisis levels, but in 2020. banks' profits halved and banks increased provisions for expected losses, reflecting a potential increase in credit risk due to the pandemic. In the context of financial indicators, large banks on average operated more safely and successfully than small banks in the observed period