The banking sector's operations for the first three months of this year are marked by an increase in approved loans of almost 40 percent, as well as a continued decline in the average effective interest rate, which amounted to 5,98 percent in March, while in the same month last year it was 7,43 percent, according to data from the Central Bank.
Banks in Montenegro approved loans worth 502 million euros in the first three months of this year, while in the same period last year, that figure amounted to 367 million euros.
The reason for the decline in interest rates at Montenegrin banks is the decrease in the six-month reference interest rate in euros, EURIBOR, which in the first three months of last year was between 3,8 and 3,9 percent, and in the same period this year it fell to 2,6 to 2,4 percent and continued to fall. This interest rate, which forms the basis for calculating all loans in euros, has now fallen to 2,11 percent, which means that it is possible to expect a continued slight decline in interest rates in Montenegro.
Every third loan in cash
Almost a third of newly approved loans in the period January - March this year were cash loans. In these three months, cash loans worth 152 million euros were approved, while in the same period last year they amounted to 112 million euros. In March this year alone, cash loans worth 62,2 million euros were approved, which is the largest monthly amount of these loans ever recorded in Montenegro.
The average effective interest rate on cash loans in the period January - March last year was between 9,73 and 9,85 percent, while in the same period this year it was between 7,55 and 7,85 percent. Which is a drop of two percentage points.
Significant growth was also recorded in housing loans, from 26 million in the first three months of last year to the current 49 million euros. The effective interest rate on this type of loan last year in this period was from 6,35 to 6,57 percent, and now it is from 5,31 to 5,41 percent.
The approval of liquidity loans also increased from 127 to 146 million euros in these comparative periods. The effective interest rate on them was also reduced from 5,44 to 6 percent to 5,16 to 5,83 percent.
Growth in investment and refinancing loans
Loans for the implementation of investment programs in the first three months of last year were approved in the amount of 16,2 million euros, while this year they are three times larger and worth 52 million. Interest rates for this purpose last year were from 6,22 to 6,38 percent and now from 4,40 to 6,32 percent.
A significant increase was also recorded in the approval of loans for refinancing obligations with other banks, from 22,3 million last year to 40,5 million in the same period this year. The average effective interest rate last year in this quarter ranged between 7,91 and 8,64 percent, and now it is from 5,97 to 7,15 percent.
In other, less common forms of loans, there was a slight decrease in the approved amounts. Thus, the amount of approved loans for the purchase of fixed assets decreased from 16 million to 14,7 million. The average interest rates on these loans in the first three months of last year ranged from 5,86 to 6,21 percent, and now in the comparative period they were from 4,96 to 5,79 percent.
Loans for construction of buildings in the first three months of this year were approved in the amount of 15 million euros, while last year for the same period the figure was 16,5 million euros. The effective interest rate on these loans last year ranged from 4,51 to 6,43 percent and now it is 5,39 to 5,76 percent.
Dedicated consumers in decline
Dedicated consumer loans approved in the period from January to March last year were worth 4,2 million euros, and now that amount has fallen to 3,5 million for the same period. The effective interest rate for this type of loan last year for these three months was from 0,32 to 1,78 percent, and now, according to this Central Bank data, it is from 0,01 to 0,03 percent.
In the first three months of this year, loans for the purchase of cars totaling one million euros were approved, while last year the figure was 1,4 million. The interest on these loans in this period last year was from 8,28 to 8,91 percent, and now it is from 6,02 to 6,67 percent.
The European Central Bank (ECB) began increasing its key interest rate in mid-2022 as part of its fight against inflation, peaking at 2023 percent in October 4,13. In early 2024, the ECB estimated that inflation in the eurozone had been brought to a manageable level and began to periodically and gradually reduce the key interest rate. The average effective interest rate on loans granted in Montenegro peaked in February last year, when it was 7,5 percent, and has been falling since then.
Citizens owe banks two billion, and the economy 1,6 billion
The total amount of approved active loans with Montenegrin banks at the end of March this year amounted to 4,85 billion euros, which is 600 million more than a year earlier.
Montenegrin citizens owed banks 2,07 billion euros at the end of March, which is 330 million more than in the same month last year.
The domestic state and private economy owes banks 1,62 billion euros, which is about 260 million more than a year ago.
At the end of March, foreign citizens and companies had loans worth 883 million euros with Montenegrin banks, which is about 80 million more.
The government and municipalities have a loan debt with domestic banks in the amount of 215 million euros, while at the end of March last year, that figure was 303 million euros.
Deposits in banks 5,6 billion, highest average interest rate 2,47 percent
Total deposits in Montenegrin banks at the end of March amounted to 5,6 billion euros, 300 million euros more than in the same month last year. Total deposits at the end of March this year are XNUMX million less than in February this year.
Montenegrin citizens have deposits of 2,15 billion euros in banks, which is about one hundred million more than the amount of total loans approved to this category of clients. Compared to March last year, deposits of domestic residents increased by 300 million euros.
The domestic state and private economy holds 1,58 billion euros in banks, which is ten million more than last year at the end of March.
Foreign citizens and their companies in Montenegrin banks had deposits worth 1,25 billion euros at the end of March, which was 83 million less than a year ago.
The average interest rate on demand deposits (on demand) was 0,01 percent in March this year, while the highest average was on deposits of individuals with a term of five years or more - 2,47 percent.
Of the total deposits held by domestic citizens of 2,15 billion, non-term deposits were worth 1,77 billion, while term deposits were 386 million. Term deposits accounted for 21 percent of total household deposits.
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