Press Releases 2017 - September

29.09.2017 - Governor Žugić takes part at the Governors` Club meeting in Moscow

27.09.2017 - A meeting of the French Ambassador and Governor Žugić Held

25.09.2017 - Invitation to loan users to initiate their restructuring and take advantage of the new legal solution

20.09.2017 - Meeting with The World Bank Head for Montenegro and Bosnia and Herzegovina Held

18.09.2017 - A high-level dialogue with the European Central Bank held

15.09.2017 - Fifteenth CBCG Council Session Held

14.09.2017 - A Meeting with the Executive Director of the Belgian-Dutch Constituency in the IMF Held

07.09.2017 - Meeting with a view to reviewing the effects of financial restructuring of loans held with banks

07.09.2017 - Meeting with the World Bank Team Held

06.09.2017 - Meeting with a Newly Appointed World Bank Head for Montenegro and Bosnia and Herzegovina Held

06.09.2017 - CBCG and CEF to Continue Successful Cooperation in the Field of Education and Professional Development

05.09.2017 - British company CCA interested in investing in the banking system of Montenegro

CENTRAL BANK OF MONTENEGRO
Podgorica, 29 September 2017

Governor Žugić takes part at the Governors` Club meeting in Moscow

The Governor of the Central Bank of Montenegro, Mr Radoje Žugić, PhD, is taking part at the meeting of the Governors` Club of the Central Asia, Black Sea Region and Balkan Countries, which is organized by the Bank of Russia in Moscow from 28 September to 1 October.

Issues of general interest for regional and global economic and financial development, as well as the activities of central banks and the current economic situation in the Club member countries were discussed at the meeting today. The governors also discussed the development and importance of the latest technologies in the financial market, as well as the monetary policy of the European Central Bank and its impact on the economies of the member countries of the Club.

In his presentation, Governor Žugić addressed the measures of the so-called the quantitative easing introduced by the European Central Bank (ECB) in 2015 with the aim of preventing deflationary tendencies and reviving economic activity in the euro area. The increased liquidity and the fall in interest rates on the European market affected the profitability of the banking sector in Montenegro and the costs of borrowing from the State. On the other hand, these measures of the ECB indirectly influenced the intensifying of growth in Montenegro. "Higher growth rates in European countries have resulted in increased demand, especially in the sectors of tourism and transport, where Montenegro has recorded significant growth," said Governor Žugić.

The Central Bank of Montenegro is a member of the Governors’ Club of the Central Asia, Black Sea Region and Balkan Countries since 2005. Membership in this prestigious organization enables the Bank to further strengthen regional cooperation in the monetary, financial and banking sectors and establish closer relations with central banks from the region.

CENTRAL BANK OF MONTENEGRO
Podgorica, 27 September 2017

A meeting of the French Ambassador and Governor Žugić Held

The Governor of the Central Bank of Montenegro, Mr Radoje Žugić, PhD, met today with the Ambassador of France to Montenegro, Ms Christine Toudic Gaborit. The meeting was also attended by Mr Jean-Pierre Gaustaud, Economic Adviser at the French Embassy in Belgrade, and Mr Jean-Marie Demange, Regional Economic Advisor at the French Embassy in Sofia.

Governor Žugić presented the basic macroeconomic data and the situation in the banking sector, as well as the activities that the CBCG conducts in order to strengthen the regulatory framework and its harmonization with EU directives and best banking practices.

As the discussion continued, the Governor expressed satisfaction with operations of the Societe Generale Montenegro Bank, stressing that this bank, adhering to a sound banking practice and successful business activities, has made a significant contribution to maintaining a stable and healthy banking system in Montenegro, this company being as well the leader of economic cooperation between France and Montenegro.

The guests agreed that our countries have very long and high quality bilateral cooperation and expressed readiness to contribute, through their engagements, to strengthening these ties, especially in the field of economy. "I believe that the founding of the French - Montenegrin entrepreneurial club, which we are currently working on, will contribute to strengthening the economic cooperation of our two countries," the Ambassador pointed out, adding that the interest of French investment companies in Montenegro is intensifying, owing to the promotion of Montenegro as an attractive tourist destination.

CENTRAL BANK OF MONTENEGRO
Podgorica, 25 September 2017

Invitation to loan users to initiate their restructuring and take advantage of the new legal solution

The CBCG wishes to introduce to the general public the benefits to the borrowers, i.e. loan beneficiaries of the recently adopted amendments to the Law on Voluntary Financial Restructuring of Debts towards Financial Institutions. Pursuant to this Law, borrowers may initiate restructuring of the past due loans in order to start negotiations with banks and microfinance institutions with the aim of finding the possibility of restructuring.

By debt restructuring, according to the model enabling the law, borrowers are facilitated with repayment of loans with banks and microfinance institutions, through the following possibilities:

• Extension of the repayment term with the reduction of monthly instalments of debt repayment,
• Lowering the interest rate,
• Releasing a part of the collateral from the mortgage, fiduciary or pledge...

Also, borrowers have further benefits:

• Possibility of borrowing under more favourable conditions in the future, due to the improved credit history report of the borrower in the Central Bank Credit Registry,
• Easier settlement of obligations towards other creditors,
• Saving time and resources through a simplified administrative procedure...

Considering that debt restructuring according to this model has multiple advantages for borrowers, the CBCG invites them to initiate loan restructuring towards banks or MFIs, and, for the purpose of registering the launched initiatives, forward the scanned documentation to CBCG as well via e-mail to [email protected]. This information will be used by the CBCG in order to assess the justifications of the rejected initiatives by banks or MFIs and the possible undertaking of measures within its competence.

Information on categories of loans eligible for restructuring in accordance with the Law, as well as which data the borrowers submit to CBCG, is contained in the Instructions to Borrowers of Banks and MFIs for providing information on the initiated restructuring initiatives pursuant to the Law.

CENTRAL BANK OF MONTENEGRO
Podgorica, 20 September 2017

Meeting with The World Bank Head for Montenegro and Bosnia and Herzegovina Held

The Governor of the Central Bank of Montenegro, Mr Radoje Žugić, PhD, met today with the World Bank Head for Montenegro and Bosnia and Herzegovina, Mr Emanuel Salinas.

The status of activities that the CBCG is implementing in order to make budget support from the World Bank more concrete was discussed at the meeting today. Governor Žugić pointed out that the CBCG implemented all the agreed activities in accordance with the specified deadlines, and that the effects of the measures taken were already visible and measurable. "In the past month, an additional decline in the level of past due loans was achieved, from 8.18% to 7.82%, and the banks announced carrying out a significant number of restructuring initiatives, which means that in the forthcoming period we can expect further reduction in the level of NPLs" said the Governor. In addition to further downsizing of the NPL level, the CBCG is committed to further improving the regulatory framework, in order to fully harmonize it with EU standards and best banking practice.

"With the positive trends recorded in the banking sector, the economic situation is improving, which is confirmed by the high growth rate achieved in the first half of the year, unofficially amounting to 4%, which we expect to be even higher," Žugić added.

Mr. Salinas expressed satisfaction with the achieved results and support to the activities taken by the CBCG, aimed at maintaining the stability of the financial system, which, with a strong fiscal consolidation by the Government, contributes to reaching the final agreement on the budget support programme.

With the agreement that the cooperation between the CBCG and the World Bank will be even more intensive and more frequent in the upcoming period, the two also discussed the preparations for the participation of the delegation of Montenegro at the forthcoming Annual Meetings of the World Bank and the IMF, to be held in mid-October in Washington.

CENTRAL BANK OF MONTENEGRO
Podgorica, 18 September 2017

A high-level dialogue with the European Central Bank held

The Central Bank of Montenegro delegation, consisting of the Governor Mr Radoje Žugić, PhD, the Vice-Governor for Banking System Supervision, Ms Irena Radović, PhD and the Vice-Governor for Financial Stability and Payment System, Mr Nikola Fabris, PhD, attended the meeting dedicated to high-level dialogue with the European Central Bank in Frankfurt today. The ECB delegation was headed by Mr Benoît Cœuré, the Executive Board member.

Governor Žugić presented the current macroeconomic situation in Montenegro and the situation in the financial system to the ECB representatives.

"According to the CBCG estimates, the average GDP growth rate in the first half of 2017 was around 4%," the Governor said and expressed the expectation that such trend will continue until the year-end and the next year, which will be in line with projections of the CBCG. Concerning the banking sector, it is characterized by a strong consolidation, liquidity and solvency ratios above the prescribed level, and the improvement in the regulatory framework, towards its full harmonization with EU standards and best banking practice. The Governor pointed out that banks in Montenegro recorded growth in lending activities, with a continuous decrease in the share of non-performing loans and interest rates, which, according to the governor, are still a fairly expensive input for the real economy.

As the meeting continued, the CBCG Vice-Governors presented the latest information on trends and developments in the banking sector and supervision, as well as in the financial stability and real economy segment.

The ECB Executive Board member, Mr Coeuré appreciated the achieved results in Montenegro and supported the ongoing and planned CBCG activities aimed at further strengthening financial stability.

Members of the Montenegrin and the ECB delegations expressed their satisfaction with the current cooperation, which will be intensified in the upcoming period, along with the progress of Montenegro in the process of the EU accession. In this respect, the plans for signing a memorandum of cooperation between the CBM and the ECB, within the Single Supervisory Mechanism was also discussed at the meeting. Namely, the ECB took over the role of bank supervisor in the European Union since 2014, thus the memorandum is intended to specify the process of information exchange, which is important for more efficient supervision.

During the dialogue, the macroeconomic situation in the Euro area, the situation in the financial sector and the expectations for the next period were discussed.

High-level dialogue is regularly held between the European Central Bank and the central banks of the candidate countries for EU membership that started accession negotiations with the European Union and aims to prepare these countries for future membership in the European system of central banks.

CENTRAL BANK OF MONTENEGRO
Podgorica, 15 September 2017

Fifteenth CBCG Council Session Held

The Council of the Central Bank of Montenegro held the fifteenth session today, chaired by the Governor, Mr Radoje Žugić, PhD.

At today's session, the Council considered and adopted the Analysis of Financial Statements of the Central Bank of Montenegro for the Period January - August 2017. According to the analysis data, total revenues in the first eight months of this year are higher by 8.2% compared to the plan or by 4.8% compared to the same period last year. In the same observed period, expenditures were lower by 10.2% compared to the plan, while their amount remained at the same level as in the first eight months of the last year, despite the higher execution of expenditures on the basis of the negative interest rate on assets invested with foreign banks. The total operating costs from January to August 2017 were 11% lower than planned, of which the staff costs were lower by 4.5% of the planned ones. The greatest savings were made in the business travel expenses, as well as operating and other business expenses, those including telecommunications services costs, representations, conferences and seminars, etc. Members of the Council expressed satisfaction with these results, with the expectation that the positive trends that characterize CBCG's operations will continue until the end of the current year.

In the Inflation Report for the second quarter 2017, indicators, expectations and determinants of inflation in Montenegro were analysed. It was noted that consumer prices in the second quarter of 2017 remained unchanged compared to the previous quarter. Observing price developments on a monthly basis, consumer price growth was recorded in April and May (by 0.1%), while the decline (-0.1%) was registered in June. On an annual basis, consumer prices increased by 2.1% in June. When it comes to inflationary expectations of banks, according to a survey conducted in July this year, the largest number of banks surveyed expects inflation to be between 2% and 2.5% by the year end. According to the results of the survey, the corporate sector also expects inflation in this range. According to an expert survey conducted by the CBCG, inflation in 2017 will range from 1% to 3%, with a central projection of 2%.

The Council adopted the Decision on the Appointment of an Internationally Recognized Independent External Auditor, which will audit the CBCG annual financial report for 2017.

The Council also discussed other current issues from the domain of its competence at today's session.

CENTRAL BANK OF MONTENEGRO
Podgorica, 14 September 2017

A Meeting with the Executive Director of the Belgian-Dutch Constituency in the IMF Held

The Governor of the Central Bank of Montenegro, Mr Radoje Žugić, PhD with the associates met with the Executive Director of the Belgian-Dutch Constituency in the International Monetary Fund (IMF), Mr Anthony De Lannoy, who was for the first time in the official visit to Montenegro.

After receiving a welcome and gratefulness  on the so far, very successful cooperation with the IMF, Governor Žugić introduced to Director De Lannoy the basic macroeconomic indicators and the situation in the financial sector, as well as the CBCG plans and activities related to further strengthening of financial stability.

The governor pointed out that, according to preliminary data, in the first half of the year, the growth was about 4%, and expressed the belief that the official data will confirm even higher growth rate, and that this trend will continue until the end of this year and in the course of the next year, as projected by the CBCG.

Speaking about the banking sector, the governor stated that the same is stable, that liquidity and solvency are above the prescribed level, and that the previous year and this year are characterized by continuous growth of assets, capital and deposits. On the other hand, interest rates and the level of non-performing loans are in continuous decline. Governor Žugić informed Mr De Lannoy about the activities that CBCG is implementing in terms of improving the process of financial restructuring, in order to free up the potential for credit growth and interest rate cuts, which would provide even stronger support to the real sector.

De Lannoy appreciated hospitality and said that Montenegro, although the smallest member of the Belgian-Dutch Constituency, significantly contributes to the work of this organization. De Lannoy also mentioned that the IMF recognizes the quality of Montenegro's macroeconomic, monetary and fiscal policy and thanks to which it makes continuous progress in these areas.

Montenegro is a member of the Belgian-Dutch Constituency representing the Montenegrin interests in the IMF, which it is composed of 14 other countries: the Netherlands, Belgium, Luxembourg, Armenia, Bosnia and Herzegovina, Croatia, Israel, Macedonia, Bulgaria, Cyprus, Georgia, Moldova, Romania and Ukraine.

CENTRAL BANK OF MONTENEGRO
Podgorica, 07 September 2017

Meeting with a view to reviewing the effects of financial restructuring of loans held with banks

The meeting of the Governor of the Central Bank of Montenegro, Mr Radoje Žugić, PhD, and his associates with the representatives of banks operating in Montenegro was held today, initiated by the CBCG in order to review the effects of loan restructuring in accordance with the recently adopted Law on Amendments to the Law on Voluntary Financial Restructuring of Debts towards Financial Institutions.

Once the meeting was opened, Governor Žugić reminded that the amendments to the Law were prepared with the intention to further improve the process of financial restructuring, and that additional incentives for creditors and debtors were introduced. "Although the share of non-performing loans in total loans has recorded a continuous decline in the past few years and currently stands at 8.2%, there is scope for further improvement of this process, which would free up the potential for growth in credit activity and decrease in interest rates, thus providing even stronger support to the real sector", said Governor Žugić.

As the meeting continued, the representatives of banks presented information on the results of the activities undertaken for the loan restructuring plan as of the entry into force of the Law on 22 June 2017. The commitment to resolving the NPLs was highlighted and banks indicated that in the forthcoming period they can expect stronger effects of the implementation of the Law.

After the representatives of the banks made their presentations, the Governor pointed out that this issue, given the limited validity of the Law (until May next year), will be in the CBCG focus in the forthcoming period, with the announcement that the CBCG will contribute, through the public campaign, to raising the borrower's awareness of the benefits of restructuring of loans according to this model. In addition, it was emphasized that the CBCG will continue to strengthen the supervision over the implementation of the commitments of banks arising from the Law, thus, in the event that a justified need arises, it will introduce an increased provisions instrument.

CENTRAL BANK OF MONTENEGRO
Podgorica, 07 September 2017

Meeting with the World Bank Team Held

The Governor of the Central Bank of Montenegro and his associates, received the World Bank team led by Mr Emanuel Salinas, Head of the WB Office for Montenegro.

Governor Žugić informed the World Bank team about the current macroeconomic situation and the situation in the financial system. He emphasized that CBCG is the only institution that has not changed its GDP growth projection and that it has proved to be correct so far, as growth for the first 6 months is 4%. He expressed expectation that the data for the third quarter will be even better and that even higher growth can be expected. He pointed out that foreign direct investments increased by 40% compared to the same period of the previous year and that the current account deficit of the balance of payments was lowered by more than 5%. He also pointed out that great progress has been made with the adoption of a fiscal strategy, at the same time being convinced that it will be fully implemented.

He said he fully agrees with the IMF's assessment that the financial system has been significantly improved. The NPL level after its maximum of over 25% in 2011 was reduced to 8.2% at end-July, the capital of banks reached the level of half a billion euros, the banks are highly liquid, the credit activity has revived, and deposits are 400 million higher than loans, which indicates healthy sources of financing.

He also stated that the CBCG prepared a set of laws (CBCG Law, Amendments to the Banking Law, Bank Resolution and Recovery Law, Law on Voluntary Financial Restructuring and Law on Financial Institutions), which will significantly improve the environment.

Head of the WB Office for Montenegro, Mr Salinas, pointed out that significant progress was made. He mentioned that the World Bank guarantee program consists of two equally significant pillars, macroeconomic and financial stability, and that progress has been made in both of these. It was noted that there is a high degree of matching of the points of view and agreed that the discussions should continue during the annual IMF meeting.

CENTRAL BANK OF MONTENEGRO
Podgorica, 06 September 2017

Meeting with a Newly Appointed World Bank Head for Montenegro and Bosnia and Herzegovina Held

The Governor of the Central Bank of Montenegro, Mr Radoje Žugić, PhD, with his associates, met with the newly appointed World Bank Head for Montenegro and Bosnia and Herzegovina, Mr Emanuel Salinas.

Following the words of welcome and gratefulness for the cooperation and support in a number of fields provided by the World Bank, Governor Žugić presented to Mr. Salinas the basic macroeconomic indicators and the situation in the financial sector. "Performance of banks in Montenegro is characterized by an increase in lending activity and falling interest rates, which contributes to the strengthening of the real sector, while the share of non-performing loans is continuously decreasing, currently standing at 8.2%," said Governor Žugić. The focus of the CBCG is to strengthen the supervision of the banks in order to maintain and further strengthen these positive trends, while simultaneously implementing intensive activities in the area of improving the regulatory framework, in order to fully harmonize it with the EU standards and best banking practice.

Mr Salinas appreciated the progress that has been made in establishing and maintaining the stability of the financial system, especially pointing out a large decrease in the share of non-performing loans in total assets of banks, with Montenegro leading in terms of the region.

The new World Bank head for Montenegro and Bosnia and Herzegovina stressed that he will, during his term, seek to provide even stronger support from the World Bank to Montenegro on the road to its further economic development through dedicated work, respect and mutual trust.

CENTRAL BANK OF MONTENEGRO
Podgorica, 06 September 2017

CBCG and CEF to Continue Successful Cooperation in the Field of Education and Professional Development

The Governor of the Central Bank of Montenegro, Mr Radoje Žugić, met today with the Director of the Center for Excellence in Finance (CEF), Ms Jana Repanšek.

Today's meeting was an opportunity to discuss the results of cooperation between the Central Bank of Montenegro and the CEF and the plans for the forthcoming period. The two agreed that the cooperation between the two institutions was so far very successful and agreed on its continuation, with the aim of further education and professional training of the CBCG staff.

According to Ms Repanšek, the CEF has prepared a comprehensive programme of specialized trainings for the next year, through which participants will be able to expand knowledge on international standards and best practices in public finance management and central banking. As Ms Repanšek stated, the CEF will focus on promoting regional cooperation in the upcoming period, through the recognition of experts in certain areas as well as their networking and connecting.

The Governor showed appreciation to the CEF Director for cooperation, pointing out that its extension would contribute to the continuing activities of the CBCG, which are aimed at strengthening and further improving the staff potential of this institution.

CENTRAL BANK OF MONTENEGRO
Podgorica, 05 September 2017

British company CCA interested in investing in the banking system of Montenegro

The Governor of the Central Bank of Montenegro, Mr Radoje Žugić, PhD, met with the representatives of Core Capital Advisors (CCA) from London today.

Mr Lenn Mayhew Lewis presented to the Governor the profile of this company, which provides consulting services in the area of investment and development project management, pointing out that CCA has an interest in investing in Montenegro, primarily in its banking system.

Governor Žugić emphasized that the CBCG is open to communicate and provide support to companies that intend to invest in Montenegro, and thus contribute to the intensification of the economic growth and development of our country.

An extension of communication was agreed so that the proposals for cooperation discussed today can be more concrete.