Lending interest rate in Montenegro declines to 10.3% in July 2013

By bne IntelliNews August 23, 2013

The weighted average effective lending interest rate on newly-extended loans fell 0.8pps y/y to 10.33% in July due to retreating rates on both corporate and retail loans, central bank data showed. In monthly terms, July’s borrowing costs stagnated after shrinking 0.4pps in June.

Effective interest rates on new retail loans fell 0.10pps y/y to 11.85% in July due to falling borrowing costs on cash and housing loans. In monthly terms, however, rates on household loans went up 0.60pps.

Rates on corporate loans dropped 0.83pps y/y and 1.12pps m/m to 9.17% due to falling rates on liquidity loans.

The decline of the value of newly-extended loans narrowed to 1.4% y/y to EUR 57.2mn in July from a 13.9% y/y contraction the month before, due to a slower drop in corporate loans. New retail loans have been increasing in y/y terms since the start of the year. Falling corporate lending likely reflects high borrowing costs and cautious banks attitude towards rising NPLs (at around 20% as of end-May).

In November 2012, the CBCG introduced a ceiling on the effective interest rate on new corporate (at 14%) and household (at 15%) loans, seeking to curb excessive lending rates and rising non-performing loans. The CBCG is also working on enhancing the framework for non-performing loan (NPL) workout, in cooperation with the World Bank. In September 2013, the CBCG will launch an assessment of the restructurable portfolio in the four banks with the biggest portion of loans that could be restructured (B and C classified loans for consumers with less than optimal credit histories) on the banking sector level. The assessment aims to help banks prepare their own plans for NPL resolution through restructuring, the World Bank’s country office told IntelliNews, without providing details on the banks in question.

The value of newly-extended loans shrank 6.3% y/y to EUR 400mn in January-July following a 7.1% decline in January-June.

Related Articles

UNCITRAL dismisses all CEAC's claims against Montenegro in KAP case

The United Nations Commission on International Trade Law (UNCITRAL) arbitration tribunal dismissed all claims of CEAC Holding, owned by Russian businessman Oleg Deripaska, against ... more

Montenegro’s government adopts urgent budget revision

Montenegro’s government has adopted an urgent budget revision to redirect funds for social payments due in November and December, a statement on the government’s website said on November 8. ... more

Russian nationalists planned to kill Montenegrin PM Djukanovic, prosector claims

Russian nationalists organised the alleged coup attempt on the eve of Montenegro’s October 16 general election and planned to assassinate Prime Minister Milo Djukanovic, Montenegro’s special ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss