The Central Bank of Montenegro (CBCG) achieved notable progress in preserving and enhancing financial stability, with the previous year marked by intensive institutional and regulatory reforms, according to its annual report adopted by the CBCG Council.
The report highlighted significant steps towards alignment with the standards of the European System of Central Banks, despite challenges in both domestic and external environments. Positive trends were observed in the banking sector, including a 7.7 percent growth in total assets, a 13.3 percent increase in loans, an 8.6 percent rise in capital, and a 6.7 percent growth in deposits.
The share of non-performing loans and receivables in total loans and receivables dropped to 3.5 percent by the end of the year, the lowest level in the past 15 years. The Council emphasized strategic progress in system modernization, notably Montenegro’s accession to the SEPA area in November, enabling faster, cheaper, and safer payment transactions for individuals and businesses.
The Council underscored the importance of continuing the development of a national instant payment system through the implementation of the TIPS clone project, with a strong commitment to professionalism. Regulatory efforts aimed at aligning national legislation with EU law were also recognized, particularly in areas critical to financial sector operations.
The development of the Financial Sector Roadmap toward sustainable finance and the Guidelines for ESG risks in credit institutions were noted as key achievements. The CBCG also adopted its first comprehensive Strategic Plan for 2025–2028, focusing on strengthening financial stability, digital transformation, EU integration, and human capital development.
The report included an overview of CBCG’s supervisory activities, which identified and assessed potential risks, prompting preventative measures to maintain financial stability. The institution reported a net profit of 12.2 million euros, with nearly five million transferred to the state budget. For the fourth consecutive year, the independent auditor issued no recommendations for the CBCG’s financial operations.
The Council highlighted the importance of CBCG’s efforts to enhance transparency, financial literacy, inclusion, and corporate social responsibility as vital contributions to the overall development and sustainability of the financial system.
The Council also reviewed the financial stability report, concluding that systemic risks remained moderate by the end of the year. Despite slowed economic growth, financial stability was preserved. Risks stemming from the global geopolitical landscape were moderately elevated, while cyclical risks related to the real estate market and fiscal risks measured by public debt levels were also assessed as moderate.
The Council adopted a report on price stability, noting that inflation continued to decelerate during the year. According to Monstat data, consumer prices were on average 3.3 percent higher than the previous year. The main contributors to inflation were housing, utilities, clothing, food, and restaurant services. CBCG experts project that inflation for the current year will range between 1.6 and 3.6 percent, with a central forecast of 2.6 percent.
The Council also adopted a Decision on the Capital Adequacy of Credit Institutions, aligning national regulation with amendments to the Credit Institutions Law and EU legislation. This transposes elements of the CRR III regulation, reinforcing capital and risk management requirements in the banking sector. The new regulation, effective from January 1 next year, will strengthen the sector’s resilience and alignment with modern European supervisory standards.
Additionally, the Council approved a license for the operation of the microcredit financial institution Flex Credit, based in Podgorica. It also reviewed and adopted reports on CBCG’s operations and policy implementation from March to April, the quarterly report on banking and financial service providers in Montenegro for the first quarter, and the results of the credit activity survey for the same period, among other matters within its jurisdiction.
