banking sector 41

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Business Environment Macroeconomic Outlook Capital Market Banking Sector Privatization and Investments Economic Freedom Business News In the Spotlight Coming up... Graphic 9. The structure of total banks’ assets 20.0 21.3 20.8

Up to 3 months

51.4 50.3 50.7

From 3 months up to 1 year 23.3 23.2 23.3

From 1 to 3 year 5.3 5.1 5.2

Over 3 years

0.0

20.0

February

40.0

March

60.0

April

Graphic 10. Structure of deposits 4.1 4.6 4.3

Financial institutions

28.9 28.3 28.7

Non-financial institutions 4.6 4.6 4.5

General Government

57.6 57.7 57.7

Households 1.3 1.3 1.4

Non-profitable organisations

3.4 3.5 3.4

Other 0.0

20.0 February

March

40.0

60.0

April

Graphic 11. Structure of deposits by sectors November 2011

92.9

December 2011

90.9

Corporate and household loans Banks and other financial institutions

Graphic 12. Interest rates April

3.12

March

3.14

February

3.08 0

9.61 9.64

Total Bank Assets and Liabilities From end-February to end-April 2012, total bank assets amounted to €8,317 million, while on a monthly level they amounted to €2,770 million. Total bank assets amounted to €2,780.4 million at end-April 2012, thus recording a decline on an annual level (4.4%). At end-February, end-March and end-April 2012, within the structure of total bank assets, loans recorded an increase, while monetary assets and deposits with depository institutions represented about 21%. In the structure of total bank assets, at end-February 2012, the highest monthly decrease was recorded by securities (5.9%). At end-March the highest monthly decrease was recorded by monetary assets and deposits with depository institutions (5.9%), while at end-April it was recorded in the areas of other assets (4.9%) and loss provisions to other assets (12.5%). In the structure of total bank assets, at end-February 2012, the highest monthly decrease was recorded by securities (5.9%). At end-March the highest monthly decrease was recorded by monetary assets and deposits with depository institutions (5.9%), while at end-April it was recorded in the areas of other assets (4.9%) and loss provisions to other assets (12.5%). In the same period, within bank liabilities, deposits represented the main share (about 65%), followed by borrowing (around 18.7%) and total bank capital (around 11.0%), whereas the remainder (5.3%) was other liabilities. At end-February and end-April, on a monthly level, the highest declines were recorded in the area of other liabilities (6.6% and 6.0% respectively). In relation to the previous month, at end-March, the highest monthly decline was recorded in the area of financial derivatives (12.3%). From end-February to end-April, within bank liabilities, deposits represented the main share (about 65%), followed by borrowing (around 18.7%) and total bank capital (around 11.0%), whereas the remainder (5.3%) was other liabilities. At end-February and end-April, on a monthly level, the highest declines were recorded in the area of other liabilities (6.6% and 6.0% respectively). In relation to the previous month, at end-March, the highest monthly decline was recorded in the area of financial derivatives (12.3%). At end-April, total bank capital amounted to €303.7 million, thus recording a slight decline on an annual level (0.7%).

Deposits

Loans

Total deposits amounted to €5,398 million from February to April 2012; on a monthly level they amounted to €1,799 million. At endApril, total deposits amounted to €1,809.3 million. Observing data from April 2012 and comparing it with April 2011, total deposits increased by 0.7%. From February to April 2012, within the deposit maturity structure, time deposits were dominant (around 62%), while demand deposits represented 38%. Within the structure of time deposits, the largest deposits were recorded in the area of short term investments; more specifically in investments with a maturity period of between 3 months to 1 year (about 50.8%). Large deposits were also recorded in the area of investments with a maturity period of between 1 to 3 years (approximately 23.2%). Observed on a sector basis, within the deposit structure, deposits made by individuals remained dominant and represented about 57.7% of the total amount.

From end-February to end-April 2012, total loans granted by banks amounted to €5,878.4 million, which at a monthly level represented €1,959 million. At end-April, total loans amounted to €1,971.5 million, thus showing a decrease of 5.8% when compared with the previous year.

Interest rates

9.65 10

The weighted average deposit effective interest rate The weighted average lending effective interest rate

Source: Bulletins of Central Bank of Montenegro January 2012 and December 2011

6

Banking Sector

From February to April 2012, the weighted average lending effective interest rate (lending interest rate) was around 9.63%. The weighted average deposit effective interest rate (deposit interest rate) was around 3.11% during the same period.

The loan-to-deposit ratio amounted to 1.08 at end-February 2012, 1.10 at end-March and 1.09 at end-April 2012. Within the structure of total loans disbursed, corporate and household loans were dominant and represented 90.4% during the period February to April 2012. The remainder referred to banks, other financial institutions, public owned organizations, nonprofitable organizations and others.

Household deposits Total household deposits amounted to €3,112.9 million from end-February to endApril 2012, and on a monthly level amounted to €1,038 million. At end-April, total household deposits recorded an increase of 1.0% at a monthly level and of 7.6% at an annual level. From end-February to end-April 2012, in the maturity structure of household deposits, time deposits were dominant and were recorded as representing 68%.


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