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09/06/2025

The Council of the Central Bank of Montenegro (CBCG) adopted the CBCG Annual Report 2024 at today’s meeting chaired by Governor Irena Radović. The Report stated that the CBCG recorded significant results in preserving and improving financial stability. Moreover, the previous year was marked by intensive institutional and regulatory reforms and substantial strides towards harmonisation with the European System of Central Banks (ESCB) standards.

The Report states that despite domestic and external environment challenges, the banking sector recorded positive trends in 2024, including growth in assets (7.7%), loans (13.3%), capital (8.6%) and deposits (6.7%). The share of non-performing loans and receivables in total loans and receivables was 3.5% as of 31 December 2024, the lowest level in the last 15 years.

It highlights strategic steps forward in modernising the system, including Montenegro’s accession to the SEPA area in November 2024, which provided the prerequisites for cheaper, faster and safer payment transactions for citizens and the economy. Special focus was given to the importance of continuing activities to develop the national instant payment system through implementing the TIPS clone project while maintaining a high level of professionalism and commitment.

The Council members also highlighted the importance of regulatory activities during 2024 to harmonise domestic regulations with the EU acquis, especially in segments of key significance for financial sector operations.

It noted the importance of developing the Financial Sector Roadmap towards Sustainable Finance and the Guidelines for ESG Risks in Credit Institutions and the adoption of the first comprehensive CBCG Strategic Plan CBCG 2025‒2028, focused on strengthening financial stability, digital transformation, integration into the EU and human resources development.

The Report also contains an overview of the CBCG’s supervisory activities in 2024, which identified and carefully analysed potential risks based on which preventive measures were taken to preserve financial stability.

The successful financial operations of the CBCG in 2024 were also highlighted, which resulted in a net profit of 12.2 million euros, of which almost 5 million were transferred to the state budget, reminding that the independent auditor has not had a single recommendation on the financial operations of the CBCG for the fourth consecutive year.

The Council particularly pointed out the importance of the CBCG’s activities to strengthen transparency, financial education, inclusion and social responsibility, which significantly contribute to the comprehensive development of the financial system and its sustainability.

At the meeting, the Council discussed the Financial Stability Report 2024, which states that systemic risks remained moderate at the end of last year. Despite the slow economic growth, financial stability was preserved, with a slightly notable risk caused by the global geopolitical situation and the cyclical risks related to the real estate market. In contrast, the fiscal risks measured by the level of public debt and its repayment were assessed as moderate.

The Council also adopted the Price Stability Report 2024, which pointed out that the trend of slowing inflation continued in the previous year. According to MONSTAT data, on average, consumer prices in January - December 2024 were 3.3% higher compared to last year. Prices under “housing, water, electricity, gas and other fuels”, “clothing and footwear”, “food and beverages,” and “restaurants and hotels” contributed the most to the growth of the average annual inflation rate. According to the CBCG expert assessment, inflation in 2025 will range from 1.6% to 3.6%, with a central projection of 2.6%.

The Council also adopted the Decision on Capital Adequacy of Credit Institutions, aligned with the amendments to the Law on Credit Institutions and European Union regulations. Adopting this Decision transposes the provisions of the CRR III regulation into the domestic regulatory framework. This new European regulation further strengthens capital requirements and risk management in the banking sector. It is a significant step forward in the context of the CBCG’s continuous efforts to reach full equivalence with the package of regulations in force in the European Union. Implementing the Decision, scheduled for 1 January 2026, will strengthen the banking sector’s resilience and its alignment with modern European supervisory standards.

At today’s session, the Council adopted the decision to issue a license to the microcredit financial institution “Flex Credit” DOO Podgorica.

At today’s meeting, the Council discussed and adopted the Report on the Operations and Policy Implementation of the Central Bank for March-April 2025, the Quarterly Report on the Operations of Banks in Montenegro (for Q1 2025), the Quarterly Report on the Operations of Financial Service Providers in Montenegro (for Q1 2025), the Report on Bank Lending Survey Results for Q1 2025, and other materials within its jurisdiction.