NewsMontenegrin banks doubled their profit to more than 66 million euros

Montenegrin banks doubled their profit to more than 66 million euros

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Montenegrin commercial banks earned a total of 66.4 million euros in the first half of the year, which is 112 percent more than in the same period last year, according to data from the Central Bank of Montenegro (CBCG).

The business result of the banking sector is higher in similar percentages compared to all the previous 5 years, and especially compared to 2020, when a moratorium on loan repayments was introduced due to the consequences of the corona virus pandemic. In the period from January to June 2020, Montenegrin banks made only 16.10 million in total profit, so that year cannot be compared with others.

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How banks managed to increase profits enormously

When asked whether the huge increase in the banking sector’s profit can be considered extra profit for which additional taxation is justified in a crisis period, the CBCG states that the good financial result that banks achieve in the half-year period, especially in the current year, is not only a consequence of the increase in net interest income , fees and commissions that are the result of their business policies and business strategies, but also profits realized on the basis of business with financial instruments, gains from exchange rate differences and other income from business.

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– Also, compared to last year’s comparative period, income-generating assets of banks in relation to total assets grew by 3.7 percentage points, while the share of general expenses in relation to basic income decreased by 9.2 percentage points.

The deposit potential of banks is growing at a higher rate than loans. The annual growth of total deposits amounts to 18.07%, while loans and receivables grow by 12.62% compared to June of the previous year. The constant growth of deposits is a reflection of the stability of the banking system and the trust of clients, both businesses and citizens. The key reason for the reduction of new debt is the increase in interest rates in banks, as well as the stricter conditions for granting loans, related to credit collateral. This trend is expected in the coming period as well, especially taking into account hints of further increases in the reference interest rate in the near future by the European Central Bank, which is also reflected in our market”, specified the CBCG.

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