There are other factors at play here, too, explains president of the PBZ management board, Dinko Lucić. “Following a strong contraction during the spring lockdown, goods exports strongly recovered by the end of the year and the full-year contraction amounted to only 0.8% in real terms,” he explains.

Another factor relates to tourism: “Successful containment of the COVID-19 outbreak allowed the country to reopen quickly in June, leading to a relatively successful peak of the tourist season in July and August,” Lucić says. The country suffered a 54% decline in tourism compared to an average of 75% registered by its Mediterranean peers.

Another key factor in Croatia’s positive outlook is the various support measures implemented by both monetary and fiscal authorities that supported enterprises hit by the crisis. These included job preservation grants for certain sectors, grants for reduced working hours, and various loans and credit liability changes.

COVID-19 hasn’t been the only challenge. “In addition to the pandemic, we should not forget that Croatia was hit by two devastating earthquakes, in Zagreb and Sisak-Moslavina County,” Lucić says. “The damage is estimated at €11.5bn for Zagreb and surrounding areas, and an additional €5.5bn for Sisak-Moslavina County.”

Investments and exports of goods have outperformed, showing record growth. Lucić says: “We are expecting that these positive trends will strengthen in the coming months, leading to GDP growth of about 5% or even above 5% in 2021 to 2022 – meaning that the economy should reach 2019 pre-COVID levels next year.”

Despite uncertainty about the new Delta variant, Lucić sees many business and investment opportunities for foreign companies, particularly in tourism: “We are seeing a lot of interest in the sector and there are recent major mergers and acquisitions happening,” he says.

Energy and agriculture are also seeing interest and in the tech sector, unicorns such as communications platform Infobip and automotive company Rimac are attracting interest.

Focusing on Croatia as a regional banking hub is great recognition of the expertise and the business that PBZ has nurtured, says Lucić, but there are still challenges. In the next couple of years a key challenge will be the introduction of the euro and the implications this has for bank infrastructure, processes and the regulatory framework.

However, Lucić adds, “The future of banking is closely linked to innovation and digitalisation. We are the market leader in new technologies and the development of new products and services for consumers and business entities is embedded in our genetic code.”

PBZ’s innovations include being the first bank to launch internet banking in Croatia, the first to introduce mobile payment and the first to introduce chip cards, NFC technology and contactless payments in the country. It was also the first commercial bank in Croatia to introduce Google Pay and Apple Pay services.

“We are making significant efforts in our transformation and in the content and availability of our digital service on both mobile and online platforms,” says Lucić. “We are constantly investing in our technological improvement on the one hand, but on the other are putting a lot of effort into nurturing and building ways to convey security and trust.” This, he says, is the key differentiator between those financial institutions that will survive and compete and those that won’t.