The growth of deposits in the last two years is not the result of growing confidence in the banking sector, but, above all, the inability of companies to invest money in a more productive and profitable way, announced the director of the Institute for Strategic Studies and Projections (ISSP) Jadranka Kaluđerović.
She told Pobjeda that the analysis of data on deposits indicates that the deposits of individuals, but especially businesses, have increased recently.
“If we look at earlier trends, we conclude that household deposits already exceeded one billion EUR in 2015, while this was the case with business deposits only last year. The constant growth of household deposits may indicate a low risk appetite, as well as a lack of ideas and opportunities for profitable investments”, said Kaluđerović.
She believes that the growth of company deposits is primarily a consequence of the decrease in economic activity due to the coronavirus pandemic, but also unstable geopolitical events.
“The decrease in economic activity, and thus the opportunities for investments, that is, investments, led to the fact that money remained in bank accounts and was not used to create new value in the economy”, explained Kaluđerović.
She reminded that for a long time the population and the economy have shown a significant level of trust in the banking sector, which is expected given the stable performance of the banking system.
“Thanks to that, banks in Montenegro rely on domestic deposits as the main source of loan financing. However, the growth of deposits, which we have witnessed in the last two years, is not the result of an increase in confidence in the banking sector, but above all the possibility for companies to invest their money in a more productive and profitable way. This is supported by the unchanged structure of deposits, in which demand deposits still have a much larger share than term deposits”, stated Kaluđerović.
She believes that whether there will be a continuation of savings growth in the coming period depends on how the economic conditions will develop.
“If they are favorable for investment, then we can expect a decrease in deposits based on an increase in investments.” Also, if they are extremely negative, the demand for cash may increase in case of uncertainty, and this may also mean a decrease in deposits”, explained Kaluđerović.
She said that the continued rise in prices could lead to money being withdrawn from banks in order to invest part of it in something that can preserve its value.
“The trend of deposits will depend on which of these trends will be present, but it seems certain that the growth rates of deposits will decrease”, said Kaluđerović.
According to data from the Central Bank (CBCG), total deposits in Montenegrin banks at the end of September reached almost EUR 5 billion, of which 2.32 billion are related to citizens’ savings, while company deposits amount to 2.64 billion EUR.
Term deposits amount to EUR 881.2 million and represent 17.74 percent of the total, and demand deposits amount to EUR 3.88 billion or 78.22 percent of the total. Funds in the escrow account amount to EUR 200.7 million and make up 4.04 percent of total deposits.
Of the total deposits of the population, EUR 709.6 million refers to non-residents.
Time deposits of the population represent 24.69 percent of the total deposits of the population, and demand deposits represent 75.2 percent. Funds in the escrow account make up only 0.11 percent of total household deposits.
Compared to the end of the previous year, total deposits recorded an increase of 18.21 percent. Deposits of residents increased by 10.96 percent, while those of non-residents recorded a decrease of 4.14 percent.
Citizens and companies save the most in Crnogorska kommerciolja banka, where deposits worth EUR 1.24 billion are located. There are deposits worth EUR 715.8 million in Hipotekarna banka, EUR 679 million in NLB, EUR 484.6 million in Universal Capital, EUR 462.6 million in Erste, EUR 353.13 million in Zapad banka, EUR 279.89 million, Lovćen EUR 274.97 million, Prva 268.24 million, Addiko 160.6 million and Zirat Bank 47.38 million, local media writes.