Abstract:

The volume and the structure of bank’s loans depend on a number of factors. They include the level of financial system development and market competition, the structure of the economy, market demand and risks, the relevant regulation, bank size, the management and the shareholders preferences, etc. The structure of loan portfolio directly affects the profit and loss account, as well as the level of bank’s exposure to risks, which is in the core of bank management.

The paper analyses the sectoral structure of banks' loans in the USA, the Eurozone and especially in the Republic of Croatia. The credit policy of banks in Croatia is in the focus of this research, with the aim to determine the causes and consequences of the loan portfolio structure among banks distributed by size. The results of the research confirm the dominant importance of granted loans in the balance sheets of all observed banks and regions, as well as the similarities in the sectoral structure of loans among banks. Finally, on a sample of Croatian banks, the paper presents some findings that sectoral restructuring of banks' loan portfolios in recent decades, at least from a profitability perspective, is not always justified.