The Central Bank (CBCG) expects a profit of 7,2 million euros this year, which is 5,05 million more than last year's plan, which projected a profit of 2,15 million euros.
This was stated in the Financial Plan of the CBCG for the year 2023, which was submitted to the parliament for familiarization.
According to the plan, revenue of 29,7 million is expected, while expenditures are projected at 22,50 million. Both items were increased compared to the plan for last year when revenues were projected at 17,10 million and expenditures at 14,95 million.
16 million from interest
The CBCG prepared the financial plan for 2023 based on the execution of the financial plan for ten months last year, the projection of the expected average balances of placements and deposits, the forecast of movements on the international financial market this year, the expected volume of payment transactions and the number of executed transactions, income from control of banks, from searching the credit register, projection of financial expenses, employee expenses, administrative, operational and other business expenses...
The CBCG cites as the reason for the increase in income this year compared to last year the larger planned realization of income from interest on securities (HOV) and deposits due to the increase in interest rates on the money and capital markets.
"Planned interest income, which includes interest income on HOV and interest income on deposits, is planned in the total amount of 16 million euros. The planning of interest income is based on the assumptions that the level of total international reserves, i.e. the volume of funds available for investment, will amount to an average of 1,29 billion, and that the mentioned funds will be formed from capital, deposits of the Ministry of Finance and client accounts", states the CBCG.
Income from interest on deposits for 2023 is planned in the amount of 8,15 million, based on the average value of deposits, overnight funds in CBCG accounts abroad and the expected interest rate of 2,5 percent.
The CBCG expects 13,69 million from other revenues from operations, which is two percent less than the plan for 2022 with, as stated in the financial plan, unchanged pricing policy for the services that the supreme monetary institution provides to its clients. Among these revenues, the largest item is the income from fees, which is projected at 12,87 million. These are fees for payment services, services from cash operations, enforcement of forced collection, control of bank operations, credit register searches...
Increased cost for gross earnings
On the expenditure side, the biggest share is business expenses, which are planned at the level of 14,21 million and they are 2,13 million more than the plan for 2022. These costs consist of compensation costs, employee costs, administrative costs, operating costs of business... The CBCG stated that these costs are 18 percent higher than the plan for 2022, which is directly caused by the increase in the inflation rate.
Employee costs (gross wages, other income and compensation for increased employee costs) are planned at 9,67 million euros and they have increased by 1,06 million compared to last year when they were projected at 8,54 million euros. The biggest share in employee expenses is gross wages, which are projected at 8,76 million, while last year they were 7,87 million. The supreme monetary institution explained that the planned share of employee costs in total expenditures for 2023 is 43 percent, which is significantly lower than the trend of participation from 2015 to 2022.
"When designing salary costs, all elements that influence the formation of the amount of this cost were taken into account, such as the calculated value of the salary coefficient, the amount of the starting base, the costs of taxes and contributions, percentages of past work of employees, etc. Also, the cost was calculated based on the planned increase in the number of employees during 2023 due to the timely and efficient performance of all functions and new tasks that were set before the CBCG by recent changes in regulations, as well as the inevitable increase in the cost of living," the CBCG explained.
The increase in employee costs is justified and it is necessary to further strengthen the personnel capacities of the supervisory function with the aim of timely implementation of activities for the application of the new regulatory framework for banking operations, which consists of the Law on Credit Institutions and by-laws adopted on the basis of that law, as well as the need to strengthen the supervisory function in the field of preventing money laundering and terrorist financing and protecting the rights of clients of credit institutions and users of financial services.
The CBCG did not state by how much the number of employees will increase this year, while it states that at the end of October last year there were 385. In October 2021, 379 workers were employed in the CBCG.
The imminent growth of administrative costs
Administrative costs are planned in the amount of 816.700 euros and are higher by 25 percent compared to the plan for 2022. These costs include: costs of office supplies, energy costs, utility services, intangible services and fees to other natural persons.
"The increase in administrative costs is the result of an increase in some categories of this group of costs due to the pronounced energy crisis, strengthening of inflationary trends and the obligation to apply the provisions of certain legal solutions. Therefore, it is inevitable that expenses from this group will achieve significant growth during the next year", the financial plan says.
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