Societe Generale to exit Montenegro or merge with local bank

By bne IntelliNews April 12, 2017

Montenegrin bank Societe Generale will either exit the Montenegrin market or it will merge with a local bank, the central bank governor Radoje Zugic was reported saying in Portalanalitika.me on April 12.

Societe Generale’s local branch has asked the central bank to allow a merger with Crnogorska Komercijalna Bank (CBCG. However, local economists say this would create a monopoly in the banking market.

“At CBCG (the Central Bank) we are analysing the potential repercussions from a merger and will decide accordingly,” Zugic was quoted to have said in Portalanalitika.

Societe Generale was the second largest bank in Montenegro in terms of net profit, which stood at €7.79mn as of end-2016, up 23.5%. Crnogorska Komercijalna Bank’s net profit, however, shrank 60% last year to €2.9mn.

In June, the International Monetary Fund (IMF) warned that low profits make Montenegrin banks’ costs volatile. Many of the 15 commercial banks operating in Montenegro could turn to loss as a consequence of even a modest funding shock, which undermines their capital adequacy. Local banks are likely to use deposit rates as a means to attract clients, which also raises their vulnerability to stressed episodes.

Read in IntelliNews Pro
Get IntelliNews Pro

Related Articles

EIF signs guarantee agreements with 11 banks in Western Balkans, unlocking €750mn for small businesses

The European Investment Fund (EIF), part of the EIB Group, said on April 15 that it has signed guarantee agreements with 11 banks and financial intermediaries in the Western Balkans. These ... more

EIB surpasses investment milestone in the Western Balkans by investing €1.2bn in 2023

EIB Global, the financial arm of the European Investment Bank (EIB) for activities beyond the EU, set a new record by investing €1.2bn in the Western Balkans in 2023, the EIB said on February 9. ... ... more

bne IntelliNews Southeast Europe Outlook 2024

This Southeast Europe Outlook 2024 has been prepared by bne IntelliNews as part of a series of annual reviews providing updates on the geopolitical, macroeconomic and commercial state of ... more

Follow Us On

Most Read

  1. EU finally boosts defence investment into arms production as Ukraine runs out of ammo
    1 month ago
  2. Don't mention the "D" word - Ukraine
    6 days ago
  3. Ukraine's birth rate plummets to 300-year low as country’s population collapses
    9 days ago
  4. The 'wet-bulb' set to kill hundreds of thousands of people if temperatures and humidity levels continue to rise
    4 days ago
  5. The models are wrong, climate change is accelerating faster than predicted
    2 days ago
  1. Russia could pay off its entire external debt tomorrow, in cash
    27 days ago
  2. Albanians campaign on social media to keep bus bridge created in freak accident
    1 year ago
  3. BRICS announce a blockchain-based payment system to create a common currency
    29 days ago
  4. Speculation swirls of “Men in Blue” in Crocus City Hall terrorist attack linked to FSB
    1 month ago
  5. Saudi Arabia to scale back plans for Neom city
    16 days ago

Reports

Dismiss