14 July 2019 - According to the latest available data for 13 banks in the system, that is, data by the end of May 2019, key components of the Balance Sheet of Central Bank of Montenegro over the one-year period records growth: assets (8.51%), loans (8.95%), deposits (6.16%) and capital (11.42%), Governor of the Central Bank of Montenegro Radoje Žugić told in an interview with Dnevne Novine daily.
Governor Žugić indicated that the Central Bank has been implementing activities referring to further improvement of the capacities for carrying out supervision over banks, as well as the activities for an adequate implementation of the regulatory framework that is in its drafting phase. He also underlined he was extremely satisfied after the meeting held with the IMF (International Monetary Fund) delegation, as they assessed the CBM was doing well and moving in the right direction. Governor Žugić was especially glad to hear the IMF’s statement that “there were no adverse effects from the two non-systemic banks on broader banking sector”.
According to Žugić, apart from positive assessments when it comes to the economic growth of Montenegro and fiscal consolidation that the Government has been effectively implementing which significantly contributes to the improvement of Montenegro’s public finances, the representatives of IMF, during their previous mission, analysed the situation in the country’s financial system as well. The general opinion is that the CBM is trending in the right direction in terms of the activities on improving the structure, instruments and processes of the banking supervision and the prevention of money laundering. In addition, IMF representatives share the CBM opinion that it’s extremely important to implement the planned audit over the quality of total assets of the banking sector (AQR). “We jointly noted that AQR would contribute to the adequate collateral valuation process in the asset classification and the allocation of share for potential bank loan losses, which would make the overall banking sector even more stable and resistant to potential unforeseen losses,” said the Governor of the Central Bank of Montenegro.
“It is true that the CBM was in the focus of the public from the introduction of bankruptcy at IBM and Atlas Bank and that it has often been heard that these two events "have shaken" the stability of the banking system. To argue with such claims, with the ultimate goal of stabilizing the depositors and preserving the stability of the financial system, in the past months we have had very frequent communication with the public. We regularly published information on the status of the main banking indicators at the system level, which confirmed that there are no risks for depositors of other banks,” said Žugić, denying all claims that stability of the banking system of Montenegro is jeopardised.
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