Montenegro’s commercial banks recorded a combined net profit of €6.5mn in the first nine months of 2015, down 68.8% y/y, according to the latest financial statements issued on the central bank's website. The Montenegrin unit of Societe Generale posted the highest profit of €6.49mn, up 52.4% y/y, followed by Crnogorska Komercijalna Banka (€6.48mn, up 91.7%) and the local unit of Erste Bank (€4.8mn, up 0.4% y/y).

Earlier this week the International Monetary Fund noted that banks in Montenegro are highly liquid and average capital ratios exceed regulatory minimums. However, although the profitability for most banks has increased, it remains weak.

Earlier this year a local analyst commented that the number of banks is too high for a country with a population of just 600,000 people, and that in the coming years most likely only three or four banks will remain on the market. On the other hand, Azmont Investments, a subsidiary of Azerbaijan’s state-owned oil company Socar, announced plans to open a bank in Montenegro.

Five banks ended the nine-month period with a loss, including the Montenegrin unit of Hypo Alpe-Adria-Bank, which swung to a net loss of €12.8mn from a net profit of €0.13mn in January-September 2014. The newly established Lovcen Banka posted a net loss of €1.42mn, while another new bank, Zapad Banka, recorded a net loss of €0.7mn and the newest bank, Ziraat Bank Montenegro, posted a net loss of €0.6mn. Komercijalna Banka swung to a net loss of €0.2mn, from a net profit of €1.6mn in the first nine months of last year.

The banks' total capital stood at some €465.1mn at end-September, up 5.2% y/y, while the sector's assets rose 12% y/y to €3.49bn.

There were 14 banks operating in Montenegro as of end-September 2015.