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The Covid-19 pandemic strongly impacted many aspects of life and business globally, resulting in stronger negative consequences in the short-run and the long-run when socio-economic indicators are observed. For that reason, total effects could be observed in more quality only in a few years. The Republic of Croatia was not exempt from a pandemic strong impact on the entire economy. It should also be noted that the whole decade before the pandemic was somewhat challenging in doing business and business performance and in many other ways due to prolonged recession in the period following the onset of the 2007/2008 financial crisis. The economy finally started to recover after 2015, and it stabilized to some extent until 2020 when the pandemic deteriorated many macroeconomic trends again. Moreover, earthquakes in March and December 2020 additionally burdened public and personal finance in the process of damages remediation. All previously mentioned circumstances strongly impacted the financial sector as well. For that reason, Croatian financial sector business performance during the crisis caused by the Covid- 19 pandemic and other specific events are in the focus of this paper. More precisely, the paper analyses business performance in general with an accent on chosen financial soundness indicators of profitability, efficiency, liquidity, risk exposure, and capitalization for relatively the most important Croatian financial institutions: commercial banks, insurance companies, and obligatory pension funds. The analysis is conducted on the available financial data for the five-year period before and during the Covid-19 pandemic (2017-2021). This research aims to determine the impact of the Covid-19 pandemic and lockdown(s) on the chosen financial soundness indicators and the overall business performance of relative the most important financial institutions in the Republic of Croatia. Research results obtained herein could be a valuable source of information for a better understanding of business performance in the financial sector in times of dynamic and unstable macroeconomic, financial or social environment caused by unpredictable event(s). |
