Governor Žugić Meets with the Association of Montenegrin Banks

29/06/2023

The CBCG Governor Radoje Žugić and his team met today with the Association of Montenegrin Banks representatives. At the meeting, they discussed the situation in the banking sector, key banking ratios, and the revision of measures to mitigate the adverse effects of the coronavirus on the financial system, which the CBCG has continuously adopted since 2020.

The meeting participants noted that the banking sector was highly liquid and solvent and that capital and deposits continuously grew, with a simultaneous reduction in non-performing loans.

Governor Žugić pointed out that banks were the driving force behind the Montenegrin economy’s growth. He pointed out the latest data showing that the current capital adequacy ratio was 18.94%, deposits recorded a monthly increase of 80 million, while the NPL stood at 5.94% at the end-May.

Governor Žugić also informed that all banks had paid funds for the Resolution Fund for 2023.  

Since the banking system, with timely and adequate CBCG measures, proved to be resistant to shocks caused by the COVID-19 pandemic and, later, the war in Ukraine, at the meeting, they also discussed the possibility of partially or fully repealing the measure prohibiting the payment of dividends to shareholders.

By abolishing this measure, following the best EU practice, credit institutions that meet regulatory requirements would be allowed to pay dividends in an amount that would not impair the credit institution operations’ security, i.e. that the payment of dividends would not breach compliance with all statutory requirements and internally determined limits.

Bank representatives expressed their satisfaction with the cooperation with the CBCG and welcomed the initiative to ease the measures.