Liquidity conditions in Montenegro’s banking sector improved at the start of 2026, with total liquid assets reaching €1.46 billion at the end of February, according to data from the Central Bank of Montenegro. This marks a 7.19% increase compared with January and a 2.72% year-on-year rise, signalling a stabilisation phase after earlier monthly fluctuations.
The rebound reflects a system that remains structurally liquid despite ongoing balance sheet expansion. Liquidity ratios across the banking sector continued to stay above regulatory minimum thresholds on both daily and ten-day monitoring horizons, reinforcing the view that short-term funding risks remain contained.
At the same time, the broader balance sheet of the sector continued to expand. Total banking assets reached approximately €7.91 billion, increasing 1.05% month-on-month and 10.71% year-on-year, indicating sustained credit growth and financial deepening within the economy.
The structure of bank assets highlights a system still heavily oriented toward lending activity. Net loans accounted for 67.3% of total assets, followed by securities at 17.36% and cash and central bank deposits at 11.85%, with the remainder distributed across other asset categories.
On the liabilities side, the sector remains strongly deposit-funded. Deposits represented 76.25% of total liabilities, underscoring the continued reliance on domestic funding rather than wholesale or external borrowing. Capital accounted for 13.27%, while borrowings stood at 6.83%, maintaining a relatively conservative funding profile.
Capital buffers also continued to strengthen, with total bank capital rising to €1.05 billion, up 1.01% month-on-month and 14.86% year-on-year. This reinforces solvency alongside liquidity, supporting the sector’s capacity to absorb shocks while continuing credit expansion.
The February data confirms a pattern visible across recent months: Montenegro’s banking system is operating with ample liquidity, stable deposit funding, and expanding balance sheets, even as short-term liquidity levels fluctuate. Earlier readings showed dips in liquid assets during January, followed by recovery in February, suggesting cyclical liquidity management rather than structural stress.
Within a broader macro-financial context, this combination of rising assets, strong deposit bases and resilient liquidity ratios points to a system increasingly aligned with European regulatory expectations. However, it also reflects a familiar structural trade-off: high liquidity alongside dominant loan exposure, which ties sector performance closely to credit quality and economic growth dynamics.
