The CBCG Allots 6.5 Million Euros to the State Budget

11/04/2024

At its meeting today, the Council of the Central Bank, chaired by Governor Ms Irena Radović, decided that the CBCG will pay 6.5 million euros into the State Budget based on the CBCG profit in 2023.

Discussing the CBCG Financial Statements for 2023, the Council members concluded that the past year was very successful considering the CBCG's achieved business results. In 2023, the CBCG recorded the historically highest net profit of 16.3 million euros since its establishment, with an unchanged pricing policy for the CBCG services to banks and other payment system participants. Such high net profit, three times higher than in 2022, resulted from significant growth in realised revenues. Total revenues amounted to 42 million euros, 99.4% more than in 2022, mainly due to the extremely high growth of the CBCG financial revenues, i.e. income from interest on deposits and short-term securities. It resulted from a substantial increase in interest rates on international financial markets due to ECB monetary policy changes and the quality management of international reserves by the CBCG.

According to the Decision on Allocating the CBCG Profit for 2023, which the Council adopted today, 50% of the net profit will be distributed to the general CBCG reserves and 10% to the special CBCG reserves, while the remaining 6.5 million euros will be alloted to the State Budget. Based on the positive financial results achieved, the CBCG allotted 15.4 million euros to the state budget in the last five years, including this amount.

In addition to the financial statements, the Council members discussed the Independent External Auditor's Report, which stated that "the attached financial statements truthfully and objectively show the Bank's financial condition as of 31 December 2023, the operating results and cash flows for the year ending on that day, in accordance with International Financial Reporting Standards". The independent external auditor did not have recommendations on the institution's financial operations for the third consecutive year.

At today's meeting, based on the earlier IMF recommendation given during the evaluation of the CBCG protective mechanisms, the CBCG established an Advisory Committee as a permanent body of the Council of the Central Bank. This body, whose Chair will be Ljubiša Krgović, the first President of the CBCG Council, has the strategic role of making recommendations to the CBCG Council regarding the policies and other acts which the CBCG Council decides on or adopts.

To comply with the amended Central Bank of Montenegro Law, the Council adopted operational risk, information security, and business continuity management policies. These documents align with international ECB policies, international standards, and good practices in these areas.

Moreover, the Council adopted the Decision on detailed conditions and the manner of granting loans to credit institutions in case of their liquidity needs today to comply with the amended Central Bank of Montenegro Law. The Decision prescribes that the CBCG may grant a liquidity loan exclusively to a solvent credit institution at an interest rate amounting to the average weighted effective lending interest rate approved by credit institutions, increased by a certain percentage point.

Since most of the measures prescribed by the Decision on Interim Measures to Mitigate Negative Impact of the Communicable Disease Covid-19 Epidemic and the Situation in Ukraine on the Financial System have ceased to be valid due to the expired deadline for which they were adopted or due to their very nature, the Council adopted the decision that terminates the validity of the said decision today.

At today's meeting, the Council also adopted the Report on Central Bank operations and implementation of the Central Bank Policy for January-February 2024, the Report on the International Reserves Management in 2023, quarterly reports on the business of banks and financial service providers as of 31 December 2023, the Report on the Audit Committee's Workfor January - March 2024, the Report on the Internal Audit's work for 2023 and other materials under its competence.

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