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Economy and Banking Sector of Montenegro

Montenegro
Location
Southeastern Europe
Population  (2017)
622 387  (0.00%)
EU Status
not a member, candidate since 2008
Currency
EUR (Euro)
Nominal GDP (2015)
3.6 bln EUR  (+0.03%)
Credit Ratings (as of Sep 2016)
-/B1
Consolidated Banking Assets (2016)
3 790.91 mln EUR  (+9.30%)
Deposit Guarantee
50 000 EUR
Number of Banks
16

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.

List of Banks in Montenegro
Offshore Banking in Montenegro

National Currency

Euro (EUR)

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

GDP

Nominal GDP (2015)Nominal GDP per Capita (2015)Real GDP Growth (2015)
3.6 bln EUR  (+0.03%)5 826 EUR  (+0.05%)3.4 %  (2014: 1.8 %)

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 1.0% 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 - 2022 are IMF's estimates.

Real GDP Growth in Montenegro.

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

In 2015, nominal GDP per capita in Montenegro was 5 826 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 -46.5% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2022 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

CPI, MoM (Jul 2016)CPI, YoY (Jul 2016)CPI, Year Average (2016)
0.6 %  (Jun 2016: 0.7 %)-0.5 %  (Jun 2016: -0.8 %)-0.3 %  (2015: 1.5 %)

According to , inflation rate in Montenegro in 2016 expressed as annual percentages of average consumer prices was -0.3% which was below the Euro Area average (0.2%) and below the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.

Inflation Rate in Montenegro.

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

Credit Ratings (as of Sep 2016)

Fitch Moody's
- B1 (highly speculative), outlook negative

Double Taxation Agreements

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

DTAs of Montenegro: 20 Signed Agreements

Montenegro signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):

 Belgium
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Finland
 France
 Hungary
 Ireland
 Italy
 Latvia
 Malta
 Netherlands
 Poland
 Romania
 Slovakia
 Slovenia
 Sweden
 Switzerland
 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.

Automatic Exchange: No Commitment to Start

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

Automatic Excnange: 0 Bilateral Agreements to Receive Information

Montenegro has not singed any bilateral agreements to automatically receive information.

Automatic Excnange: 0 Bilateral Agreements to Send Information

Montenegro has not singed any bilateral agreements to automatically send information.

Further Information

FATCA

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).

FATCA Status in Montenegro
IGA agreed on 30 June 2014, Model 1

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

Financial Market Development

Financial Market Development
4.2 (max 7.0), 47th out of 138 countries
Banks' Soundness
4.3 (max 7.0), 93rd out of 138 countries

According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Montenegro is scored 4.2 out of maximum 7.0 and ranked 47th out of 138 analysed economies, trustworthiness and confidence of financial market is scored 5.1 (24th place).

Financial Market Development in Montenegro.

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


Soundness of banks is scored 4.3 bringing Montenegro into the 93rd place.

Soundness of Banks in Montenegro.

Chart 5. Soundness of Banks in Montenegro. Source: WEF.

Further Information

Deposit Guarantee Scheme

Maximum Protected Amount
50 000 EUR

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

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.

Local Currency (Euro) Foreign Currency
- B2 (highly speculative)

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

Banking Sector Structure

Number of Banks
16
Consolidated Assets (2016)
3 790.91 mln EUR  (+9.30%)

Currently there are 16 credit institutions operating in Montenegro.

In 2016 consolidated banking assets in Montenegro were 3 790.91 mln EUR. The consolidated banking assets' evolution is shown at Chart 6 below.

Consolidated banking assets in Montenegro.

Chart 6. Consolidated banking assets 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
Banks15
Central banks1

Table 2. Number of banks by category in Montenegro.

Major Banks of Montenegro

RankNameTotal AssetsMarket Share
1 Crnogorska komercijalna banka AD Podgorica594.69 mln EUR15.69 %
2 NLB Banka AD Podgorica475.00 mln EUR12.53 %
3 ERSTE Bank AD Podgorica450.47 mln EUR11.88 %
4 Societe Generale banka Montenegro AD450.22 mln EUR11.88 %
5 Hipotekarna banka AD Podgorica428.79 mln EUR11.31 %
6 Prva banka Crne Gore AD Podgorica376.11 mln EUR9.92 %
7 Atlas banka AD Podgorica259.40 mln EUR6.84 %
 

Crnogorska komercijalna banka AD Podgorica

Crnogorska komercijalna banka (CKB) is a universal commercial bank providing retail, private and corporate banking products and services.

Services
Retail Banking
Private Banking
Corporate Banking

Crnogorska komercijalna banka AD Podgorica is the 1st largest bank in Montenegro in terms of total assets. In 2016 its total assets were 594,69 mln EUR, providing the bank with the market share of 15.69%. In 2016 the bank's net income was 2,87 mln EUR.

Crnogorska komercijalna banka AD Podgorica participates in deposit guarantee scheme of Montenegro. This scheme covers accounts up to 50 000 EUR per bank per depositor.

NLB Banka AD Podgorica

NLB Banka AD Podgorica is a universal commercial bank, providingretail and corporate banking products and services to individuals, small- and medium-sized enterprises as well as other businesses.

Services
Retail Banking
Corporate Banking

NLB Banka AD Podgorica is the 2nd largest bank in Montenegro in terms of total assets. In 2016 its total assets were 475,00 mln EUR, providing the bank with the market share of 12.53%. In 2016 the bank's net income was 5,99 mln EUR.

NLB Banka AD Podgorica participates in deposit guarantee scheme of Montenegro. This scheme covers accounts up to 50 000 EUR per bank per depositor.

ERSTE Bank AD Podgorica

ERSTE Bank is present in Montenegro since July 2009. ERSTE Bank offers a wide range of retail and corporate banking products and services to individuals and businesses, including loans, deposits, SWIFT international transactions, domestic payments, payment cards and e-banking.

Services
Retail Banking
Corporate Banking

ERSTE Bank AD Podgorica is the 3rd largest bank in Montenegro in terms of total assets. In 2016 its total assets were 450,47 mln EUR, providing the bank with the market share of 11.88%. In 2016 the bank's net income was 7,94 mln EUR.

ERSTE Bank AD Podgorica participates in deposit guarantee scheme of Montenegro. This scheme covers accounts up to 50 000 EUR per bank per depositor.

Societe Generale banka Montenegro AD

Established in 1864, Société Générale is one of the largest French banks. Société Générale is a universal bank, offering its clients retail, corporate, investment banking products and services as well as private banking and asset management.

Services
Retail Banking
SME Banking
Corporate Banking

Societe Generale banka Montenegro AD is the 4th largest bank in Montenegro in terms of total assets. In 2016 its total assets were 450,22 mln EUR, providing the bank with the market share of 11.88%. In 2016 the bank's net income was 7,79 mln EUR.

Societe Generale banka Montenegro AD participates in deposit guarantee scheme of Montenegro. This scheme covers accounts up to 50 000 EUR per bank per depositor.

Hipotekarna banka AD Podgorica

Hipotekarna Banka is a universal commercial bank, providing retail, corporate and investment banking products and services to individuals and businesses.

Services
Retail Banking
Corporate Banking
Investment Banking

Hipotekarna banka AD Podgorica is the 5th largest bank in Montenegro in terms of total assets. In 2016 its total assets were 428,79 mln EUR, providing the bank with the market share of 11.31%. In 2016 the bank's net income was 3,62 mln EUR.

Hipotekarna banka AD Podgorica participates in deposit guarantee scheme of Montenegro. This scheme covers accounts up to 50 000 EUR per bank per depositor.

Prva banka Crne Gore AD Podgorica

Prva Banka Crne Gore (First Bank of Montenegro) traces its roots back to 1901 when Niksic Saving Bank was founded which became the first bank in Montenegro. In 2007 after more than a century the bank changed its name to Prva Banka Crne Gore. Prva Banka Crne Gore operates as a modern universal bank providing retail, corporate and investment banking products and services at fair prices to individuals, business entities and public sector.

Services
Retail Banking
Corporate Banking
Investment Banking

Prva banka Crne Gore AD Podgorica is the 6th largest bank in Montenegro in terms of total assets. In 2016 its total assets were 376,11 mln EUR, providing the bank with the market share of 9.92%. In 2016 the bank's net income was 167 867,65 EUR.

Prva banka Crne Gore AD Podgorica participates in deposit guarantee scheme of Montenegro. This scheme covers accounts up to 50 000 EUR per bank per depositor.

Atlas banka AD Podgorica

Founded in 2002, Atlas Bank is one of the leading business banks in Montenegro, providing a wide range of retail and corporate banking services.

Services
Retail Banking
Corporate Banking

Atlas banka AD Podgorica is the 7th largest bank in Montenegro in terms of total assets. In 2016 its total assets were 259,40 mln EUR, providing the bank with the market share of 6.84%. In 2016 the bank's net income was 121 000,00 EUR.

Atlas banka AD Podgorica participates in deposit guarantee scheme of Montenegro. This scheme covers accounts up to 50 000 EUR per bank per depositor.