16.10.2024. The 60th EBF meeting of associated members was held in Brussels, attended by the General Secretary of the UBCG, Bratislav Pejaković. At the meeting, in addition to information on the regional state of banks in the Western Balkans, the activities of the European Banking Federation, the implementation of the digital euro was presented, and a review was made of the state of the German economy, which is already in recession for the second year. The direct impact on banks and the financial sector in general was also pointed out, which can come from a greater degree of consolidation in all sectors, the expected improvement of the Supervision System, digitization of finances and payments, implementation of AI in the financial sector, about strategy in financial education, etc.
AMB presented a cross-section of the economic and banking sector in Montenegro. The improvement of the credit rating is a confirmation of the stability and progress that Montenegro has achieved, as well as a confirmation that we are becoming a predictable and stable environment. According to the latest data, inflation was 2.2 percent in August this year, which represents the lowest recorded inflation rate since April 2021.
The movement of public debt in relation to GDP in recent years has been characterized by a downward trend, which is primarily a consequence of strong economic growth. However, as the deadlines for repayment of large one-time debt installments are approaching, as is the case with domestic and foreign bonds, it is necessary to provide funds for timely servicing of debt to creditors. Projections of debt trends in the medium term, which are included in the fiscal strategy for the period 2024-2027, testify to the Government’s aspiration that the net debt be aligned with the Maastricht criteria, i.e. about 60 percent of GDP, depending on the year.
Montenegrin citizens and businessmen are increasingly taking out loans in 2024. Namely, newly approved loans had an annual growth of 28.3 percent in the first half of the year. Deposits in the banking system continue to grow, so they reached a record level at the end of the second quarter. The average weighted effective interest rate of banks on newly approved business at the end of June amounted to 6.87 percent and was higher by 0.61 percentage points compared to the rate from June 2023. Speaking of interest rates, it was stated that in March 2024 there was an initiative by the CBCG in the direction of reducing interest rates when it comes to the population, which all banks accepted in action and lowered interest rates for Montenegrin citizens by 1-2%, which significantly brought the environment closer conditions in developed EU countries.
The net profit of Montenegrin banks in June 2024 amounted to 87.2 million euros, which is 31.4 percent more compared to June 2023.
PSD2 was implemented in the Montenegrin banking system. It has been successful since from April 8, 2024.
A new Law regarding AML was adopted, i.e. Against Money Laundering and Financing of Terrorism with amendments that harmonize it with EU directives.
In the coming months, Montenegro can expect a final decision on membership in the SEPA mechanism, and then a very challenging organizational and technical period for banks will begin.
