Government confirms borrowing 50 million euros from Hungarian-owned CKB bank – three days after another Hungarian bank approved major loan to the Bosnian Serb entity, Republika Srpska.
Montenegro’s government on Thursday confirmed it took out a 50-million-euros loan from Hungarian-owned CKB bank, three days after another Hungarian bank, EXIM, approved a 110-million-euros loan to the Bosnian Serb entity Republika Srpska to fill budget gaps.
Montenegrin Minister of Finance Aleksandar Damjanovic said the loan from Montenegrin Commercial Bank, owned by Hungary’s OTP bank, will be repaid in five years, with a year grace period of one year and a fixed annual interest rate of 7 .5 per cent.
“Since the adoption of this year’s budget rebalance, Montenegro has borrowed a total of 55 million euros, and a new loan has been agreed with CKB bank to secure the fiscal reserve for the next year,” Damjanovic told the government session.
During his visit to Budapest on November 11, Finance Minister Damjanovic met OTP group CEO Sándor Csányi, where they discussed a bilateral credit arrangement.
The same day, Damjanovic and Hungarian Foreign and Trade Minister Péter Szijjártó said they discussed Hungarian companies participating in infrastructure projects in Montenegro.
On December 19, meanwhile, Republika Srpska signed a 110 million euros loan with the Hungarian Export-Import Bank to finance its budget and refinance some other debt.
The 10-year loan, with a fixed interest rate of 5 per cent, comes from a Hungarian state-owned EXIM Bank, which has assets of almost 5 billion euros.
Since Montenegrin independence in 2006, Hungarian firms – some with direct ties to the state – have invested almost half a billion euros in the Adriatic country, mainly in banking and telecommunications.
In August 2006, Hungary’s OTP, bought 100 per cent of Montenegro’s Commercial Bank, CKB, for 105 million euros, at the time the largest bank in the countr,y with a 44 per cent market share and 150,000 customers in a country of some 620,000 people.
Three years later, OTP purchased 90.6 per cent of Societe Generale Montenegro for 35.6 million euros. OTP-owned banks now account for 40 per cent of the Montenegrin banking sector.
Last October, Hungarian tech firm 4iG bought mobile network operator Telenor Montenegro, which boasts roughly 475,000 mobile subscriptions and a leading 37 per cent market share.
There was already a Hungarian presence in Montenegrin telecommunications through Magyar Telekom’s 2005 purchase of 76.5 per cent of shares in Montenegrin Telekom.
Since Viktor Orban became Prime Minister in 2010, Hungarian firms – some linked to Orban’s ruling Fidesz party and benefitting from big state contracts – have invested heavily in Slovenia, Serbia, North Macedonia, Bosnia and Herzegovina, and Croatia, says on BalkanInsight.