SWOT Analysis of Montenegro Banking Sector

Strengths Stability and strong currency Favorable  legislative  and institutional framework Independent  Central bank without emission function Implemented international standards in the bank monitoring  Private banking sector  Liberal system in financial and capital flows Good human capital

Opportunities Attracting foreign investments Continuation of  implemented international standard in banking monitoring Improvement of cooperation with international  financial institutions Implemented IT technology in     extension banking services Continue perfection human capital extension banking services bank Dispersal variety  of banking Improvement of  monetary statistic and analytic Implemented IT technology in  extension banking services bank

Threats High transaction costs  Unfair competition Early assumption of determination of international bureaucracy standard Inefficient  adhibition  of legislative solutions in certain districts Inefficient and  long procedure of bank bankruptcy and liquidation Impossibility of outstanding account payment

Objectives

• Finalizing bank privatization and opening bankruptcy and liquidationprocess
• Increases in efficient monitoring of banks through implementation of Basel 1.
• Making conditions for further decreasing interest rate
• Working on further legislation improvement
  • Which directly or indirectly influences banking sector
• Improvement of payment circulation in order to increase efficiency
• Decrease in transaction costs of user banking services
   

Bank Founding

• A bank is founded and operates as a joint stock company
• A bank may be founded by domestic and foreign legal entities and private individuals, at least two founders
• No party may engage in banking operations without  license of Central Bank
• Minimum financial amount of initial capital may not be less than EUR 5,000,000
• The bank founders shall submit to the Central Bank the application for a bank license with next documents:
  • The foundation contract
  • The proposed by-laws
  • Data on professional qualifications and working experience for the last five years for proposed members of Managing Board of the bank
  • Data of shareholders holding more than 5%
  • Business plan of the bank for the next three years
  • Technical and personal capabilities data

Status of Banking Sector

10 commercial banks Concentration of financial potentiality 59,5 of total banking capital is assets of 3 banks Increasing trend in credit activities of banks total sum of credit increased 40% in 2006

Institutional ambient of banking sector

Institutional ambient in which bank work characterizes usage of euro as legal means of payment

Since establishment of Central bank, adoped new laws are:

• Law on the Central Bank
• Law of bank
• Law of bankruptcy and liquidation
• Law of deposit security

Banks in Montenegro

Leading Financial Groups

Societe Generale Group – One of the leading financial groups in the euro zone. 386 billion assets under management. The third corporate and investment bank in the euro zone. More than 19 million customers in the real banking in the world. The Societe Generale Group purchased 64,4% shares of »Podgoricka Banka« in state ownership, for 385 euros per share.
 
Hypo Alpe-Adria-Bank Group is in Montenegro, too. This group have  locations in Austria, Italy, Slovenia, Croatia, Bosnia and Herzegovina, Serbia and Montenegro, and Germany. The Hypo Alpe-Adria-Group employs more than 5,200 people that serve more than 750,000 customers. The three strategic business sectors of the Hypo Alpe-Adria Group - banking, leasing and consulting.