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IMF confirms bankrupt banks haven’t endangered Montenegro’s banking system

Guverner Radoje Žugić

According to the latest available data for 13 banks in the system, that is, data by the end of May 2019, key components of the Balance Sheet over the one-year period record growth: assets (8.51%), loans (8.95%), deposits (6.16%) and capital (11.42%), Governor of the Central Bank of Montenegro, CBCG, Radoje Žugić, told in an interview with Dnevne Novine daily.

Mr Žugić indicated that they have been implementing activities referring to further improvement of the capacities for carrying out supervision over banks, as well as the activities for an adequate implementation of the regulatory framework that is in its drafting phase. He also underlined he was extremely satisfied after the meeting held with the IMF (International Monetary Fund) delegation, as they assessed the CBCG was doing well and moving in the right direction. Governor Žugić was especially glad to hear the IMF’s statement that “there were no adverse effects from the two non-systemic banks on broader banking sector”.

“Apart from positive assessments when it comes to the economic growth of Montenegro and fiscal consolidation that the govt has been effectively implementing and that significantly contributes to the improvement of our public finances, the representatives of IMF, during their previous mission, analyzed the situation in our financial system as well. The general opinion is that the CBCG is trending in the right direction in terms of the activities on improving the structure, instruments and processes of the banking supervision and the prevention of money laundering. In addition, IMF representatives share the CBCG opinion that it’s extremely important to implement the planned audit over the quality of total assets of the banking sector (AQR). We jointly noted that AQR will contribute to the more adequate collateral valuation process in the asset classification and the allocation of share for potential bank loan losses, which would make the overall banking sector even more stable and resistant to potential unforeseen losses,” said the Governor of the Central Bank of Montenegro.

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