Montenegro’s bank assets rise 4.8% y/y to EUR 2.9bn at end-March as lending recovers.

By bne IntelliNews May 30, 2013

Montenegro’s commercial bank assets increased 4.8% to EUR 2.9bn at end-Q1 supported by higher corporate and household lending, central bank (CBCG) data showed.  The reading is good news and implies a gradual recovery as bank assets have been retreating since January 2010 (latest available). The total assets to GDP ratio stood at 82.7% at end March, slightly down from 82.9% of GDP a year earlier.

The CBCG revised its banking sector statistics for the 2009-2012 period in line with the international accounting standards.  Data prior to 2009 are yet to be published.

Corporate loans which accounted for 42% of total domestic credit rose 5.2% to EUR 1.1bn at end-March. The recovery of corporate credit activity in 2013 was mirrored by strengthening deposit collection and could imply better corporate income and activity. Retail loans (35% share in total loans) also increased 4.5% to EUR 866mn.

Loan growth is expected to support a 2.5% GDP expansion this year following a 0.5% contraction in 2012, according to government estimates. Nevertheless, credit supply remains constrained by high share of non-performing loans (NPL).According to IMF data issued in April 2013, the share of NPL in total loans in Montenegro is among the region’s highest as it rose from 7.2% in 2008 to 18.5% in September 2012.  The central bank introduced in November 2012, a temporary ceiling on the effective lending interest rates on new loans in attempt to limit excessive lending rates and curb rising NPL.

Montenegro's bank assets and loans, EUR mn Dec-09 Dec-10 Dec-11 Dec-12 Mar-13
Total assets 3,025.2 2,943.7 2,809.7 2,808.3 2,889.3
y/y,% n/d -2.7 -4.5 -0.1 4.8
m/m,% -1.7 -0.8 -1.7 -0.5 -0.1
Total loans 2,644.1 2,517.9 2,359.2 2,342.0 2,490.7
y/y,% n/d -4.8 -6.3 -6.3 6.0
m/m,% -4.2 -1.0 -1.6 0.2 -0.7

Related Articles

Montenegro’s opposition unite behind anti-Nato candidate ahead of presidential election

Almost all opposition parties in Montenegro have agreed to back a single candidate for president in the April 15 election, hoping to ... more

Montenegro's police identify former soldier decorated by Milosevic as US embassy bomber

Montenegro’s police have revealed that a former soldier named Dalibor Jaukovic threw a grenade at the US embassy in the early hours of February 22 , ... more

Petr Kellner reportedly in talks with Telenor on sale of CEE assets

Petr Kellner, Central Europe’s richest man, is reportedly the bidder for the assets of Norwegian telecommunications group ... more