Banking Sector
Privatization and Investments
BANKING SECTOR
Total Bank Assets and Liabilities
total capital of banks amounted to € 277.9 million, recording a decline at the annual level (3.1%).
From the end of September to the end of November 2012, total assets and liabilities of banks amounted to € 8,551.20 million, while the average monthly level amounted to € 2,850.4 million. Total assets and liabilities of banks amounted to € 2,822.10 million at the end of November 2012, recording a decline at the annual level (1.2%). At the end of September, the end of October and the end of November 2012, in the structure of banks’ assets, net loans accounted for the main share (61.0%), followed by cash and deposits with depository institutions (about 27,0%) (Graphic 1). Graphic 1: The structure of total banks’ assets
Banks’ assets
and banks’ liabilities, in % Loans Monetary assets and deposits Other asset items Deposits Borrowings Total banks’ c apital Other 0,02 SeptemberO
0,04 ctober
0,06
0,08
0,0
November
Source: Bulletin of Central Bank of Montenegro October, November, December 2012.
From the end of September to the end of November, within the banks’ liabilities, deposits accounted for the main share (about 69.6%) and recorded an increase of share in total banks’ liabilities. In addition, borrowings (average around 15.01%) recorded a fall of share, while total banks’ capital (average around 10.5%) recorded an increase of share in total banks’ liabilities (Graphic 1). The total capital of banks amounted to € 833.4 million from September to November 2012, while at the average monthly level amounted to € 277.8 million. At the end of November, the
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Deposits Total deposits amounted to € 5,949.50 million from the end of September to the end of November 2012 and at the monthly level amounted to € 1,983.17 million. At the end of November 2012, the total deposits amounted to € 1.982,90 million. Observing data from November 2012 and comparing to November 2011, total deposits increased by 8.3%. From the end of September to the end of November 2012, within the deposit maturity structure, share of time deposits recorded a decrease (amounting to around 60.5% of total deposits), while share of demand deposits recorded an increase (amounting to around 39.5% of total deposits). In the structure of time deposits, the largest share recorded deposits with maturity from 3 months to 1 year (average about 54.9%) and they recorded an increase of their share. Deposits with maturity up to 3 months recorded a fall of their share (19.4%). Observed by sectors, in the deposit structure, deposits of natural persons were still dominant with a share of about 56.5%.
deposits were dominant with 69.5%. In addition, time deposits recorded an increase of their share. Loans From the end of September to the end of November 2012, total loans granted by banks amounted to € 5.617,30 million, which was at the monthly level € 1.872,43 million. At the end of November, total loans amounted to € 1.866,10 million, thus 3.7% less than in the previous year. The loan-to-deposit ratio1 amounted to 0,95 at the end of June 2012, 0,95 at the end-October and 0,94 at the end of November 2012. In the structure of total loans disbursed, corporate and household loans were dominant by 92.0% in the period from September to November 2012, whereas the remaining referred to banks, other financial institutions, public owned organizations, nonprofitable organizations and others. Interest rates From September to November 2012, the weighted average lending effective interest rate (lending interest rates) amounted to around 9.50%. The weighted average deposit effective interest rate (deposit interest rates) amounted to around 3.21% in the same period. ■ Graphic 2: Interest rates, period-end, in %
According to the announcements of the Government of Montenegro, the main projects expected this year will be in the energy sector: the launching of the tender for gas and oil exploration is expected; there are interests in building the Thermo Power Plant Pljevlja’s second block; and it is expected to start with construction of the first small hydro power plants and their commissioning. The Government also prepared a proposal for the Privatization Plan 2013. The privatization process will be orientated towards repeated procedures of failed privatization processes and new projects for which open calls have not been invited yet.
Investments Cable Car Kotor – Lovcen – Cetinje An approximately 15 km long cable car with four stations is to be constructed from Cetinje through Lovćen to Kotor. The cable car, whose gondolas can accommodate 8 persons, will be the longest cable car on the Adriatic coast and is the requirement for the planned tourist development along the route. The European Bank for Reconstruction and Development (EBRD) called the tender for seeking a consultant
for the construction of the cable car. Italy’s DBA Group won the tender among nine reputable bidders. The advisory assignment is expected to start in the first quarter of 2013 and has an estimated overall duration of six months. The consultant should prepare a technical review and public-private partnership tender for the cable car project. The public-private partnership (PPP) should involve the government of Montenegro with the private concessionaire to be selected through an open international tender. The cable car project will help to fulfill one of the main objectives of the government of Montenegro
The Government Has Set Up a New Body to Support Large Investors The Government has recently set up the Developing Project Secretariat, a special body dealing exclusively with large investment ventures and providing support in solving administrative and other business constraints. The reason for establishing such a body, which will be accountable to the Prime Minister directly, was numerous problems investors were facing both on a local and national level. On several occasions, foreign investors complained about slow administration and long procedures for doing business in Montenegro. Therefore, many projects that were started remained only dead letter in planning documents, or were stuck at the beginning. The role of the Secretariat will be to identify problems of investors, whose project could have significant impact on development of the Montenegrin economy and to help in their elimination. According to analysis so far, the biggest problems were noted at local authority level. The majority of complaints referred to unclear costs of local self-government, long periods for obtaining permits, slow administration and extensive paperwork. The Secretariat contact is: nebojsa.popovic@srp.gov.me Ten New Hotels
Household Deposits Total household deposits amounted to € 3,363.10 million from the end of September to the end of November 2012, and at the monthly level amounted to € 1,121.03 million. At the end of November, total household deposits amounted to 1,134.70 million and recorded an increased of 1.8% at monthly level and 10.6% at the annual level. From the end of September to the end of November 2012, in the maturity structure of household deposits, time
Privatization and Investments
and the municipalities of Kotor and Cetinje, which is to develop highquality tourism amenities.
Source: Bulletin of Central Bank of Montenegro July, August, September 2012.
1 This ratio represents the relationship between the amount of loans and deposits. In this case loans were below deposits by 5% at the end of September, 5% at the end of October and by 6% at the end of November 2012.
The head of the newly formed Developing Projects Secretariat, Mr. Nebojša Popović has announced an intensive investments cycle. The construction of several hotels is expected to start either by the end of the current or at the beginning of the next year: Jadran and Galeb in Ulcinj, a five-star hotel in Bečići to be built by Capital Estate, Suisse hotel in Budva, a new hotel Queen’s Beach in Miločer, a marina and golf course on Luštica, a new exclusive resort at Plavi horizonti
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Privatization and Investments (Blue Horizons) in Tivat, a five-star hotel in Kotor, a new VIP marina in Kotor, and a resort in Kumbor. Also, at the beginning of 2013, the conditions for reconstruction of the hotels Planinka and Jezera will be met, which will contribute to an improvement of hotels on offer in Žabljak. Montenegro’s Delegation to the Emirates The Prime Minister of the Government of Montenegro, together with his colleagues the Minister of Economy Mr. Vladimir Kavarić and the Minister of Agriculture and Rural Development Mr. Petar Ivanović visited the United Arab Emirates to participate at the Sixth World Renewable Energy Summit (WFES 2013) and III IRENA Assembly. The Montenegrin delegation met with high representatives of the UAE in order to discuss the date of holding the first meeting of the Montenegro and UAE Mixed Economic Committee. Also was discussed the holding of a regional renewable energy conference under the auspices of IRENA and the Government of Montenegro.
Privatization and Investments
New Investments The Minister of Agriculture and Rural Development Petar Ivanović talked with the Minister of Development and Waters in UAE and representatives of companies interested in investing in the agriculture sector of Montenegro. Australia’s Balamara Resources Defines Indicated Resource for Montenegro project Australian mining project developer Balamara Resources has defined the first indicated resource for its Montenegro base metals project of 1.32 million t at 3.88% zinc, 3.28% lead and 0.29% copper. “A Inferred Resource 1.63 million t at 16.51 grams per t silver was also defined within the main area along with an additional resource of 0.37 million t at 89.17g/t silver outside the main zone,” Balamara Resources said in a statement. The updated report made by independent consultants includes the results from 10 holes drilled at the Brskovo deposit in 2012 to upgrade part of
the Brskovo deposit from Inferred to Indicated status. Balamara said that this would in turn serve as a basis for feasibility studies and mine planning, to target any increases in tonnage and grade, and to incorporate silver mineralization into the resource estimate for the first time. “The final seven holes from the Brskovo drilling program have now largely been completed, with remaining drilling or assaying to be completed during 2013.” Brskovo is one of three deposits that make up the Montenegro base metals project. The other two deposits are Visnjica and Zuta Prla and, together, the three deposits form a single coherent mineralized system. Japanese Companies Interested in Investing in Montenegro The high-level meeting with the presidents and executive directors of 70 companies from Japan interested in investing in countries of Southeast Europe was organized in Vienna with the support of the Government of Japan and the Japanese Agency JETRO. The Montenegrin Investment Promo-
tion Agency (MIPA) presented the investment opportunities and the environment for doing business in Montenegro. Japanese companies expressed interest in investing in Montenegro, especially in the agriculture, energy and industrial sectors. Beginning of Works on Luštica Peninsula The Prime Minister Milo Đukanović met with representatives of Orascom Holding Development – President of the Board Mr. Samih Saviris, Chief Executive Director Gerhard Nielsen and Chief Executive Director of Luštica Development Samuel Meyer. During the meeting updates were given on present progress of activities and when any new construction on the tourist complex would start. It was noted that conditions for starting the main construction works in the marina have been met and that € 90 million-worth of works on infrastructure facilities should start by the end of 2013. The Orascom group, as the investor of this project, expects to receive construction permits soon, so that it can continue with the implementation of this investment.
Open calls MIDAS 4th Call The Ministry of Agriculture and Rural Development within the MIDAS project (Montenegro Institutional Development and Agriculture Support) said it announced the fourth
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call for applications for grants of a total of 1.6 million euro ($2.1 million) in the farming sector. Applications by farmers should be sent from February 1 to April 30, 2013. Eligible applications will receive grant support of 50% of the total amount of the planned investments. The amount of eligible investment ranges from 10,000 euro to 70,000 euro.More information about this Call available at: www.midas.co.me
Privatization plan for 2013
At the meeting held on 18th January 2013, the Privatization Council adopted a privatization plan for 2013, which was chaired by Prime Minister Milo Djukanovic. The goal of privatization is to increase the competitiveness and efficiency of the companies that are stateowned and encouraging foreign investment and entrepreneurship, as well as increasing employment and improving living standards. During 2013, the privatization process will be implemented through: 1. The sale of shares and assets by public tender; 2. The sale of shares on the stock exchange; 3. The sale of shares and assets by public auction;
4. Valuation of tourism sites / companies through public private partnership 5. Sale of companies or assets that are not included in the plan. The sale of shares and assets by public tender; 1. The procedure for sale by public tender will include: 2. NIG “Pobjeda” Joint Stock Company, Podgorica, 3. Institute “dr Simo Milošević” Joint Stock Company, Igalo, 4. “Kontejnerski terminal i generalni tereti” Joint Stock Company, Bar 5. “Novi duvanski kombinat” Joint Stock Company, Podgorica – partial privatization and/or recapitalization. Companies for which it is planned to prepare tender documents: 1. Joint Stock Company “Montecargo” Podgorica, 2. “Montenegro airlines” Joint Stock Company, Podgorica; 3. “Budvanska rivijera” Joint Stock Company, Budva; 4. “Ulcinjska rivijera” Joint Stock Company, Ulcinj; 5. “Institut crne metalurgije” Joint Stock Company, Nikšić; 6. Electrode factory “Piva” Joint Stock Company, Plužine. ■
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