The Central Bank of Montenegro published the conclusions of the 74th meeting of the Financial Stability Council and its Information on Financial Stability for the second quarter of 2025, assessing overall financial stability as safeguarded. The banking sector was described as sound, liquid and solvent, with continued growth in deposits and credit amid moderate exposure to systemic risks. The update noted growth in retail trade, construction and industrial output in the first six months of 2025, alongside a year-on-year decline in tourist overnights and arrivals over the same period. Public finances were assessed as stable, while households’ position strengthened due to rising real wages and lower unemployment. Deposits totalled EUR 5.71 billion at end-June 2025, representing 77% of banks’ liabilities and capital and rising by EUR 329 million year on year (6.11%), while total loans reached EUR 5.17 billion, up 15.23% year on year, and new lending increased by 40% in the first half of 2025. Cyclical risks were identified as still present, particularly rising real estate prices and increased household borrowing. If these trends continue, the Central Bank of Montenegro indicated it would respond by amending macroprudential policy or other instruments as needed, with an emphasis on continuous risk monitoring.
Central Bank of Montenegro 2025-09-12
Central Bank of Montenegro Financial Stability Council flags moderate systemic risks as loans and deposits continue to grow
The Central Bank of Montenegro reported that financial stability is safeguarded, with the banking sector remaining sound, liquid, and solvent amid moderate systemic risks. Despite growth in deposits and credit, cyclical risks persist due to rising real estate prices and increased household borrowing. The bank may adjust macroprudential policy if these trends continue, emphasizing ongoing risk monitoring.