The CBCG meets with the World Bank representatives

10/12/2018

The Governor of the Central Bank of Montenegro, Mr. Radoje Žugić, met today the World Bank team led by Linda Van Gelder, the World Bank's Regional Director for Western Balkans.

The Governor Žugić introduced World Bank representatives with the current macroeconomic developments and the situation in the banking sector. As the Governor pointed out, preliminary data indicate that the year-on-year economic growth amounted to respective and 4.5% and 4.9% in Q1 and Q2 2018, mostly resulting from positive trends in tourism, industrial output (especially electricity production) and construction.

The banking sector data for the first ten months of 2018 show that all key business indicators recorded positive trends compared to the same period of 2017, and thus assets grew by 6.6%, loans by 9.2%, deposits by 8.5% and capital by 0.1%. The average weighted effective lending interest rate continued to drop, reaching its historic nadir of 6.39%. Non-performing loans also declined, mostly as the result of the implementation of the Law on Voluntary Financial Restructuring of Debts towards Financial Institutions.

The Governor informed the World Bank representatives about the introduction of interim administration in Atlas bank and IBM bank, expressing his expectation that this measure will stabilize the situation in the troubled banks. As he said, the interim administration was necessary due to deteriorated financial condition of these banks and its primary aim is to protect the depositors’ interests. 

The Director Van Gelder commended the impressive progress made in the strengthening of the financial sector stability resulting, as she indicated, from the activities of the Central Bank of Montenegro taken so far.

The World Bank representatives expressed their readiness to continue supporting further activities of the Central Bank of Montenegro aimed at additional strengthening of the banking sector’s soundness.