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13/04/2018

The Council of the Central Bank of Montenegro held the twenty-sixth session today, chaired by the Governor Radoje Žugić. 

The Council considered and adopted the Report on the Central Bank operations and policies implemented for January 2018, where it was stated that the activities of the CBCG during the reporting period were implemented in line with the planed commitments under the Central Bank of Montenegro Work Programme for 2018. It has been stated that positive trends from the previous year continued in 2018. As a result of this, the financial system, dominated by banks, has been significantly improved.

The Council adopted Annual financial statements with the independent external auditor’s report for 2017. It has been noted that the financial operations of the CBCG for 2017 were marked by a high level of rationalisation of costs. To wit, during the previous year, the administrative and overhead expenses of the CBCG were significantly lower than planned. The independent external auditor gave his positive opinion on the financial statements of the CBCG.

As a result of measures of the internal economy, the achieved rationalisation of costs and the increase of workload, the CBCG, without increasing the prices of its services, recorded a high net profit of 2.7 million euros at the end of 2017. In implementing the provisions of the Central Bank of Montenegro Law, the Council adopted the Decision on allocation of the CBCG profit for 2017, according to which the realised profit, in the amount of 50%, is allocated to the State budget. The remaining 50% will be directed on the strengthening of the core capital of the CBCG, as defined by the Decision on the increase of the core capital of the CBCG, which was also adopted by the Council today.

The Council has also adopted a set of bylaws that regulate the operations of providers of financial services in accordance with the Law on Financial Leasing, Factoring, Purchase of Receivables, Micro-Lending and Credit-Guarantee Operations. Since the Law will be applicable from 11 May 2018, this created preconditions for the establishment of regulatory and supervision competencies and powers of the CBCG towards of financial services providers. The adoption of these regulations defines the obligations of providers of financial services in the process of issuing licenses, risk management and reporting system towards the CBCG. In order to create preconditions for the implementation of the above-mentioned Law, the Council has also adopted the Decision amending the Decision on Determining Tariff for Calculating Fees Charged for the Central Bank of Montenegro Services.

On today’s meeting, the Council adopted the Decision Amending the Decision on the Content, Deadlines and Manner of Compiling and Submitting Bank’s Financial Statements. This Decision amends the reporting forms that banks have to complete and submit to the CBCG, as the result of the IFRS 9 implementation.

The Council also passed the Decision Amending the Decision on Statistical Data to be Submitted to the Central Bank of Montenegro for the Purpose of Compiling the Balance of Payments of Montenegro. This amendment was the result of the amended chart of accounts for banks applicable as of 1 January 2018.

Today, the Council also discussed and adopted the Annual Macro-economic Report for 2017, which provides with an overview of the most important trends in the real, fiscal and financial sectors last year. The report indicates that Montenegro’s macro-economic performance in 2017 was far better than in 2016, and that vulnerabilities in financial, fiscal, and real sectors decreased. In 2017, according to preliminary MONSTAT data, Montenegrin economy grew 4.4%. Such result was mostly fuelled by intensified activities on constructing large infrastructural projects, as well as recorded growth in construction, energy, tourism, forestry, trade, and most types of transport. The Report also points that the economy’s competitiveness improved through surplus recorded in invisible trade and through the maintaining of high FDI level. 

Annual CPI inflation was 1.9% in December 2017, while average annual inflation rate in 2017 was 2.4%. 

In 2017, the banking sector was sound and liquid, and recorded aggregate profit of 35.1 million euros.

On the today’s meeting, the Council discussed other current issues under its competence.