Prva banka Crne Gore has filed a €6 million damages lawsuit against Montenegro, alleging that a police operation at a Podgorica building housing one of its branches triggered an €8.475 million decline in deposits and caused material and reputational losses. The bank is seeking €5 million in material damages and another €1 million for alleged reputational damage.
Bank Claims €1 Million in Lost Interest Income
Prva banka says deposits fell by €8.475 million following police operation. It estimates that the decline resulted in approximately €1.002 million in lost net interest income, together with around €11,000 in lost payment and account fees. The bank argues that publicity surrounding the operation affected customer confidence and contributed to withdrawals. The claims will be examined through court proceedings. Police have previously said the operation targeted another person and premises, while securing the area containing the bank branch was a standard safety measure.
Court to Examine Link Between Operation and Losses
The alleged deposit decline is significantly larger than the direct income loss claimed by the bank. Withdrawn deposits reduce the funds available for lending, investment and fee-generating customer relationships, while the financial effect depends on how the funds would otherwise have been deployed and whether replacement funding was required.
A key issue in the proceedings will be whether the bank can establish a direct connection between the police operation, customer withdrawals and the claimed losses. The timing and scale of deposit movements are therefore likely to be relevant. The calculation of lost earnings may also be disputed because returns differ depending on whether deposits are held at the central bank or used for mortgages, corporate loans or securities.
Banking Sector Remains Highly Liquid
Montenegro’s banking system remains highly liquid, with sector deposits exceeding €6 billion, capital adequacy above regulatory minimums and non-performing loans at historically low levels. The case therefore concerns the alleged commercial impact of a specific state action on Prva banka rather than a wider liquidity problem in the banking sector. The proceedings could also have implications for claims involving enforcement operations at commercial premises shared with unrelated businesses. For banks, such events can create reputational and liquidity risks because customer withdrawals may occur quickly, while disputes over their causes can take much longer to resolve. Prva banka is asking the court to determine whether the alleged effects on its deposits, income and reputation should be compensated by the state. The €6 million claim remains subject to court proceedings, and the alleged losses have not been established as damages.
