One of the 15 banks operating on the Montenegrin market had a NPL ratio of 43.2% of gross loans at end-November, the daily Pobjeda reported. Three other banks had a NPL ratio above the systemic average but the daily did not reveal the names of the banks due to the local banking law. According to official data cited by the daily, the share of bad loans in the banking system amounted to 6.95% of gross loans at end-November. Bad loans reportedly stood at EUR207.5m at end-November and the total loan portfolio of the banks amounted to EUR2.99bn. Out of the four lenders with toxic loans above the system average, the lender with the lowest NPL ratio had 9.08% bad loans in its loan portfolio.
We note that the central bank took provisional management over two troubled local lenders, Invest Banka and Atlas Banka, in December to protect the interests of depositors and prevent further deterioration of the financial situation in those lenders. The central bank later determined that Atlas Banka could be recapitalized and saved, while Invest Banka was declared bankrupt. The two banks are locally-owned and their market share is just over 6%.