This paper aims to examine some of the macroeconomic drivers of nonperforming loans (NPL) in Croatia. Unemployment rate, industrial production index, construction works volume and the number of tourist arrivals were evaluated as the drivers on a quarterly data sample from 2008q4 to 2020q4. Following quantile regression approach, unemployment rates and construction works volume appeared as significant drivers of NPL in Croatia. Furthermore, empirical findings from this paper suggest asymmetric effects on NPL from its drivers. While decrease in construction works volume and increase in unemployment rates were found to correspond with increase in NPL, an increase in construction works volume and decrease in unemployment rates were not correlated with decrease in NPL. Consequently, the paper brings implications for credit institutions in Croatia within the context of COVID-19 pandemic crises.

This paper aims to examine drivers of Liquidity coverage ratio (LCR) in Croatia. The intention of this study is to examine and analyse the effect of Return on Equity (ROE), Non-performing Loans (NPL), and Gross domestic product (GDP) on Liquidity Coverage Ratio (LCR) in the Croatian banking sector. The population of this study is Croatian banking sector from q3 2016 to q3 2021. Empirical results suggested real GDP growth rates and NPL levels as LCR drivers in Croatia while effects from ROE were not empirically supported. The results of this study indicate NPLs and GDP simultaneously affect LCR. Consequently, the study has implications for banks in Croatia.