Banking sector in Montenegro. Free template from 2 Macroeconomic data 20022003200420052006 GDP (mil...

Banking sector in Montenegro

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Macroeconomic data2002 2003 2004 2005 2006

GDP (mil €) 1,301.50 1,433.00 1,535.00 1,644.00 1,778.81

GDP per capita € 2,109.11 2,317.90 2,472.99 2,638.00 2,790.50

GDP growth (%) 1.70 2.30 3.70 4,10 6.50 Inflation 9.40 6.70 4.30 1,80 2.5

Unemployment rt. 30.45 25.82 22.6 17,00 15.5

Average wage 193 271 302.81 326.50 376.37

Total credit 124.66 200.63 284.08 377.30 653.1

Savings deposits 22.21 45.07 80.68 173.02 351.8

Investments 182.90 213.62 111.08 382.82 502.00

Sources: Central Bank Of Montenegro;Institute for Strategic Studies and Prognoses


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SWOT analysis Banking sector in Montenegro

• Strengths

Stability and strong currency

Favorable legislative and institutional framework

Independent Central bank without emission function

Implemented international standards in the bank monitoring

Private banking sector Liberal system in financial

and capital flows Good human capital


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SWOT analysisBanking sector in Montenegro

• Weaknesses

Distrust in banking sector Low rating deposit High interest rate on credit Furlough from

international market for year

Missing regulation in certain districts

Payment circulation is still not completely reformed

Rigid labor law Inefficient court system


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SWOT analysisBanking sector in Montenegro

• OpportunitiesAttracting foreign

investmentsContinuation of implemented

international standard in banking monitoring

Improvement of cooperation with international financial institutions

Implemented IT technology in

extension banking services


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• Opportunities

Continue perfection human capital

extension banking services bank

Dispersal variety of banking Improvement of monetary

statistic and analytic Implemented IT technology

in extension banking services

bank


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• Threats High transaction costs Unfair competitionEarly assumption of

determination of international bureaucracy standard

Inefficient adhibition of legislative solutions in certain districts

Inefficient and long procedure of bank bankruptcy and liquidation

Impossibility of outstanding account payment


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Objectives Finalizing bank

privatization and opening bankruptcy and liquidationprocess

Further increase in efficient monitoring of the banks through implementation of principles of Basel 1.

Making conditions for further decreasing interest rate


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Objectives

Working on further legislation improvementwhich directly or indirectly influences banking sector

Improvement of payment circulation in order to increase its efficiency

Decrease in transaction costs of user banking services


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Bank Founding

• A bank is founded and operates as a joint stock company.

• A bank may be founded by domestic and foreign legal entities and private individuals, at least two founders.

• No party may engage in banking operations without license of Central Bank

• Minimum financial amount of initial capital may not be less than EUR 5,000,000.

Source: Central Bank


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Bank Founding• The bank founders shall

submit to the Central Bank the application for a bank license with next documents:

the foundation contract, the proposed by-laws, data on professional

qualifications and working experience for the last five years for proposed members of Managing Board of the bank,

data of shareholders holding more than 5%,

business plan of the bank for the next three years,

technical and personal capabilities data

Source: Central Bank


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Status of banking sector

• 10 commercial banks• Concentration of financial

potentiality – 59,5 of total banking capital is assets of 3 bank.

• Increasing trend in credit activities of banks - total sum of credit was increase for 40% in 2006

124,66200,63

284,08

377,3

653,1

0

100

200

300

400

500

600

700

2002 2003 2004 2005 2006

Total amount of credit


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Institutional ambient of banking sector

Institutional ambient in which bank work characterizes usage of euro as legal means of payment

• Since establishment of Central bank adoped new laws are:

Law on the Central Bank Law of bank Law of bankruptcy and

liquidation Law of deposit security

Source: Ministry of Tourism


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Bank in MontenegroName of bank headquorters Establishing

year

1 Crnogorska Komercijalna banka AD

Podgorica 1997

2 Euromarket banka NLB AD Podgorica 2000

3 Hypo Alpe-Adria Bank AD Podgorica

Podgorica 2006

4 Podgorička banka AD Podgorica 1906

5 Opportunity banka AD Podgorica 2002

6 Atlasmont banka AD Podgorica 2002

7 Montenegrobanka AD Podgorica 1995

8 Prva banka Crne Gore AD Nikšić

Nikšić 1901

9 Hipotekarna banka AD Pljevlja 1991

10 Komercijalna banka AD Budva 2003


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Leading financial groups • Societe Generale Group – One of the

leading financial groups in the euro zone. 386 billion assets under management. The third corporate and investment bank in the euro zone. More than 19 million customers in the real banking in the world. The Societe Generale Group purchased 64,4% shares of »Podgoricka Banka« in state ownership, for 385 euros per share.

• Hypo Alpe-Adria-Bank Group is in

Montenegro, too. This group have locations in Austria, Italy, Slovenia, Croatia, Bosnia and Herzegovina, Serbia and Montenegro, and Germany. The Hypo Alpe-Adria-Group employs more than 5,200 people that serve more than 750,000 customers. The three strategic business sectors of the Hypo Alpe-Adria Group - banking, leasing and consulting .

Banking sector in Montenegro. Free template from 2 Macroeconomic data 20022003200420052006 GDP (mil...

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