Economy and Banking Sector of Montenegro

Montenegro is a country in Southeastern Europe (Balkan peninsula). Montenegro is a candidate for joining the European Union since 2008.

Montenegro is a middle-income country, with a service-oriented economy transitioning to a market system. Main sectors of Montenegrin economy are steelmaking, aluminum, agricultural processing, and tourism.

Banking sector of Montenegro is characterized by relatively small size, small number of banks operating as universal banks, high degree of concentration and high share of foreign capital.

Location Southeastern Europe
Population (2016)622 218 ↑ (0.00%)
EU Status not a member, candidate since 2008
National Currency EUR (Euro)
    Nominal GDP (2015)3.6 bln EUR ↑ (+0.03%)
    Nominal GDP per Capita (2014)5 561 EUR ↑ (+0.03%)
    Real GDP Growth (2015)3.4 % ↑ (2014: 1.8 %)
Inflation Rate 
    CPI, Year Average (2015)1.6 % ↑ (2014: -0.7 %)
Credit Ratings (as of Sep 2016)
    Moody'sB1 highly speculative, outlook negative
    S&PB+ highly speculative
Double Taxation Agreements 20 signed agreements
Information Exchange 
    Automatic Exchange no commitment to start
FATCA IGA agreed on 30 June 2014, Model 1
Banking Sector
Financial Market Development 4.2 (max 7.0) rank: 54th out of 138 countries
    Banks' Soundness 4.2 (max 7.0) rank: 103rd out of 138 countries
Deposit Guarantee Scheme 
    Maximum Protected Amount 50 000 EUR
Country Ceiling for Deposits 
    Foreign CurrencyB2 highly speculative
Banking Sector Structure 
    Number of Banks16
Major Banks
 Crnogorska komercijalna banka AD Podgorica  Prva banka Crne Gore AD Podgorica
 NLB Montenegrobanka AD Podgorica  Hipotekarna banka AD Podgorica
 ERSTE Bank AD Podgorica  Hypo Alpe-Adria Bank AD Podgorica
 Societe Generale banka Montenegro AD
 List of Banks in Montenegro

Montenegro's Economy

National Currency

Montenegro does not have its own currency: since 2002 Montenegro has been using Euro unilaterally.



According to Eurostat, nominal GDP of Montenegro in 2015 was 3.6 bln EUR.

Montenegro outperforms the European Union in terms of real GDP growth with the average annual differential coming to 1.1% over the past 10 years (2005 - 2015). In 2015 real GDP growth was 3.4% which was above the Euro Area average (1.6%) and above the European Union average (1.9%). Real GDP growth in 2016 - 2021 are IMF's estimates.

Real GDP Growth in Montenegro.
Chart 1. Real GDP Growth in Montenegro. Source: Eurostat, International Monetary Fund.

In 2014, nominal GDP per capita in Montenegro was 5 561 EUR.

Montenegro has a below-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, fell behind that of the European Union by -45.9% over the past 10 years (2004 - 2014). GDP per capita at PPP in 2015 - 2021 are IMF's estimates.

GDP Per Capita at Purchasing Power Parity in  Montenegro; European Union = 100.
Chart 2. GDP Per Capita at Purchasing Power Parity in Montenegro; European Union = 100.

Inflation Rate

According to , inflation rate in Montenegro in 2015 expressed as annual percentages of average consumer prices was 1.6% which was above the Euro Area average (0.0%) and above the European Union average (0.0%). Inflation rates in 2016 - 2021 are IMF's estimates.

Inflation Rate in Montenegro.
Chart 3. Inflation Rate in Montenegro. Source: International Monetary Fund.

Taxation in Montenegro

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

Montenegro signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

 Czech Republic
 United Kingdom

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Montenegro didn't sign the automatic information exchange agreement and didn't indicate a timeline of the start of the automatic information exchange.

Further Information:
Automatic Exchange of Information on Financial Accounts
Countries Which Will Not Automatically Exchange Account Information



Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

Montenegro agreed in substance to use FATCA on 30 June 2014 (Intergovernmental Agreement Model 1): the text of the IGA has not been released and financial institutions operating in Montenegro are allowed to register on the FATCA website consistent with the treatment of having an IGA in effect provided that Montenegro continues to demonstrate firm resolve to sign the IGA as soon as possible.

Further Information:
FATCA and European countries


Montenegro's Banking Sector

Financial Market Development

According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in Montenegro is scored 4.2 out of maximum 7.0 and ranked 54th out of 138 analysed economies. Soundness of banks is scored 4.2 bringing Montenegro into the 103rd place, trustworthiness and confidence of financial market is scored 5.0 (26th place).

Financial Market Development in Montenegro.
Chart 4. Financial Market Development in Montenegro. Source: WEF.

Deposit Guarantee Scheme

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Montenegro are summarised in Table 1.

Scheme Participantsall credit institutions operating in Montenegro (including branches of foreign banks), branches of Montenegro's banks abroad
Eligible Depositorsnatural persons, entrepreneurs, legal entities
Covered Accountsall deposit accounts
Maximum Protected Amount50 000 EUR
Paid In CurrencyEUR

Table 1. Deposit guarantee scheme in Montenegro.

Further Information:
Deposit Guarantee Schemes in Europe


Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Foreign currency deposit ceiling for Montenegro] is B2 (highly speculative).


Banking Sector Structure

Currently there are 16 credit institutions operating in Montenegro.

All the credit institutions operating in Montenegro can be classified into several categories. Table 2 summarises the number of banks in each category.

CategoryNumber of Banks
Central banks1

Table 2. Number of banks by category in Montenegro.


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