Page 98 - SE Outlook Regions 2022

3.7.2 Banks

The banking sector has remained profitable despite the coronacrisis. Its
net profit for the first nine months of 2021 stood at €43.6mn, up 141.5%
year on year.

In January-September, four of the top performers posted higher profits
compared to the same period in the previous year. Profits in the first
three months of the year came mainly thanks to the positive result of
four banks – Crnogorska Komercijalna Banka, NLB Banka, Erste Bank
and Hipotekarna Banka.

Crnogorska Komercijalna Banka ended the period with the highest net
profit of €15.52mn, reversing a net loss of €0.6mn a year ago. NLB
Banka posted a net profit of €10.15mn in the first nine months, up more
than three times y/y. Erste Bank followed with a net profit of €6.95mn,
down 51.8% y/y. Hipotekarna Banka ended the period with a net profit
of €5.05mn, up 35.3% y/y.

Central bank data also showed that Montenegrin commercial banks'
assets increased 13.1% y/y to €5.2bn at the end of October after rising
12.4% y/y the previous month. Bank loans, which accounted for 66.2%
of total assets, increased 7.3% y/y in October after moving up by 9%
y/y in September, with total stock reaching €3.44bn. The increase
reflected a higher rise in lending to companies. Corporate lending went
up 4.2% y/y to €1.24bn, while household loans grew 2.8% y/y to
€1.45bn at end-October.

Deposits also increased in October, by 22.9% y/y, after rising 20.9% y/y
the month before, reaching €4.06bn. Corporate deposits increased
34.1% y/y, after rising 33.1% y/y in September. The total corporate
deposit stock reached €1.69bn. Household deposits were 16.7% y/y
higher y/y at €1.96bn, after rising by 15% y/y in September.

In September, Montenegrin banks passed the first asset quality review
(AQR) carried out by the local central bank in line with EU standards.

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