The share of non-performing loans (NPLs) in Montenegro dropped to 7% in November, central bank data showed on January 24. The NPL ratio stood at 10.3% at end-2016.
The International Monetary Fund (IMF) has noted that solvency stress tests showed strong indications of inadequate provisioning of NPLs in four Montenegrin banks. The fund also said that the high levels of NPLs and low-quality loans threaten the stability of long-term funding of a few banks, and warned that if banks do not manage to improve the quality of their loan books, it may become difficult to attract funding at a viable cost.
The stock of NPLs reached €190.1mn at end-November, down 2.1% m/m and 26.6% y/y.
The central bank also provided data about the stock of total overdue loan payments (including those that do not count as NPLs), which fell 14.1% m/m and declined by 31.4% y/y to €210.7mn.