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

APS, EBRD buy €400mn sub-performing Romanian loans from Piraeus

The European Bank for Reconstruction and Development (EBRD) announced that alongside debt recovery specialist APS it is taking over a ... more

Turkish Deniz Bank stops opening Russian accounts

One of the largest Turkish banks DenizBank has significantly tightened the conditions for opening accounts for Russian nationals since the beginning of 2024 and has practically stopped approving such ... more

EBRD backs OTP Leasing to boost SME financing in Ukraine

The European Bank for Reconstruction and Development (EBRD) has stepped in to bolster financing for small and medium-sized enterprises (SMEs) in Ukraine, providing a guarantee to OTP Leasing to the ... more

Follow Us On

Most Read

  1. Shocking trial of ex-minister has shifted domestic violence attitudes in Kazakhstan, says brother
    5 days ago
  2. RAGOZIN: Exhausting Russia, strategies and fantasies
    4 days ago
  3. COMMENT: Aliyev continues to block the chance of peace in the South Caucasus
    7 days ago
  4. Russia is producing weapons at a record pace, and Ukraine’s partners are trying to increase support for Kyiv
    6 days ago
  5. Central European populism bites the hand that feeds it
    7 days ago
  1. Albanians campaign on social media to keep bus bridge created in freak accident
    2 years ago
  2. Saudi Arabia to scale back plans for Neom city
    27 days ago
  3. Iran vs Israel: Who is better equipped for war?
    23 days ago
  4. Leading emerging markets move rapidly up World Bank’s PPP GDP and FDI confidence rankings
    28 days ago
  5. The ruble overtakes the yuan as Russia's main currency for settling international trade deals
    28 days ago

Reports

Dismiss