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08/04/2019

The Council of the Central Bank of Montenegro (CBCG) held its forty-third meeting on Friday 5 April chaired by the Governor, Radoje Žugić.

As the public has already been informed, the most important agenda item of the meeting was the discussion on the condition of Atlas Bank AD Podgorica. Since it was determined that liabilities in Atlas Bank AD Podgorica under interim administration exceeded the assets, and that the resolution measures in this bank during interim administration had not led to improved condition in the Bank, the Council made a decision on instigating bankruptcy proceeding against the bank (more details are available here).

Mirko Radonjić, a graduate economist from Podgorica has been appointed the bankruptcy administrator of Atlas Bank AD Podgorica.

On its Friday meeting, the Council discussed and adopted the Annual financial statements with the independent external auditor’s report for 2018. The independent external auditor gave his positive opinion on the financial statements of the CBCG assessing that financial statements veraciously and objectively show financial position of the CBCG and its operations and cash flows, in compliance with the international standards. Moreover, the external auditor did not have any objection to the financial operations of the CBCG that would refer to drawbacks in the internal control system.

The reports’ data show that the total revenues of the CBCG of 16.7 million euro were 17 percent higher than the plan and 14 percent higher than in 2017. These data, along with the fact that the tariff policy remained the same in 2017 and 2018, with no increase in changes of the CBCG tariffs for its services, confirm that the financial operations of the CBCG were very positive in 2018.

Moreover, business expense trends pointed to rational operations of the CBCG. To wit, total expenses for employees remained at the 2017 level, while administrative expenses followed the plan, and operating expenses were 7 percent lower than planned.

As the result of such operations, the CBCG recorded net profit of cca. 3.57 million euro, i.e. which was by 37 percent more than the net profit recorded in 2017. The Council also adopted the Decision on allocation of the CBCG profit for 2018, and the Decision on the increase of the core capital of the CBCG in 2018.

The Council adopted the Guidelines for developing risk analysis and risk factors for the purposes of prevention of money laundering and terrorist financing by reporting entities under the supervision of the Central Bank of Montenegro which, in a comprehensive and clear manner, explain the obligations of reporting entities supervised by the CBCG in the prevention of money laundering and terrorist financing. The Guidelines provide uniform implementation of the provisions of the AML/CTF Law by the reporting entities, their acting efficiently and effectively in risk assessment for the purpose of preventing money laundering and terrorist financing. Therefore, the ultimate objective of the Guidelines is the prevention and the achieving of the best possible results in this area at the state level. 

The Council adopted the Report on Bank Lending Survey Results for the Fourth Quarter of 2018, which point that the lending standards for enterprises and households have been more favourable, resulting from the increased competition at the market. According to the assessment of banks, the competition at the banking market resulted in the decreasing of interest margins, fees and commissions in the last quarter of 2018. The Survey results also point to growing demand for corporate and household loans in the fourth quarter of 2018. Corporate demand was mostly driven by the need to finance working assets and the restructuring of the existing debts, while the need for refinancing existing debts and the purchase of immovable properties and other non-durable goods were the growing factors for increased demand in household loans.