The view on banks as investments in Croatia is challenged by two phenomena: dual holdings (owners are intensely involved in bank balance sheet as, apart from equity, they provide a significant portion of deposits and loans) and the impediments to determining the cost of equity (as only a handful of banks are traded and with questionable liquidity in the capital market). The paper contributes to the literature by applying the panel regression on the translog cost function in order to calculate the shadow cost of equity for banks in Croatia for the period from 1994 to 2016. In the next step, the Economic Value Added was calculated by taking into account the dual holding role of bank owners. The results suggest that the shareholders economic value is significantly different from the accounting value. In addition, it seems that the standard view that domestic banks are less profitable than foreign banks is only valid from the accounting perspective.