Montenegro’s bank assets rise 7.4% y/y to EUR 3bn at end-August 2013

By bne IntelliNews September 23, 2013

Montenegro’s commercial bank assets increased 7.4% y/y to 3.0bn at end-August, speeding from a 5.4% y/y rise the month before, supported by rising lending and cash and deposits held with the central bank, data from the central bank (CBCG) showed. The total assets-to-GDP ratio stood at 87.3% at end-August.

Loans, which accounted for the bulk of bank assets (83%), went up 5.7% to EUR 2.5bn at end-August after rising 5.5% y/y the month before. Household loans grew 6.8% to EUR 880.6mn, following a 6.6% annual increase in July. On the other hand, corporate lending growth slowed to 0.4% at end-August, from 0.6% the month before as rising loans to foreign and state-owned companies was partly offset by falling loans to private companies.

Bank’s cash and deposits with the central bank, which include banks' reserve requirements, climbed 25.3% y/y to EUR 348mn at end-August, acceleratinfrom a 8.0% annual growth in July, likely reflecting stronger deposit collection.

Bank lending and assets have been showing signs of recovery since January 2013 after retreating in annual terms since January 2010 (latest available) supported by both the corporate and retail segments. However, corporate lending growth has weakened since the second quarter of the year, possibly reflecting reduced demand and banks’ cautious attitude towards rising NPLs.

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