We recall that Serbia needs 10 million euros to establish the bank, 40 million Kuna in Croatia, which is over 5 million euros. In Bosnia and Herzegovina, the minimum amount of stock capital in money and the lowest amount of net capital to be maintained cannot be less than 15 million convertible marks.
"To meet the harmonization of regulations with the EU, the assumption is that the founding capital will be subject to revision. It is likely that several elements will be taken into account in harmonizing depending on the strategy and the dynamics of approaching EU standards. On the other hand, there is a need for attractiveness to bring new business investors to Montenegro. We are aware of the size of our market, the number of banks, as well as the fact that there are smaller states with a higher number of banks," Pejakovic said.
He warned that it should be attractive to get the foreign investment, and in the context of projections that some major world players recognize Montenegro as an ideal business area.
"Fintech, digitalization, good telecommunications, platforms for various business, make it possible for investors to establish a business in Montenegro and operate globally. The amount of capital for such players is less important than business conditions," he says. Pejakovic told us that he believes that investment banking has a future in Montenegro as well.
"We have more banks that provide custody for private and investment banking, which means the ability to invest in the country and abroad. This is the segment that can be more developed and through attractive tax rates to bring new players who have the knowledge and experience in working at the global level. Montenegro is two to two and a half hours from all European centers, on the recognized path of implementing the international standards, with access to the Adriatic Sea, with moderate climate and sun throughout the whole year, which is perhaps unimpressed for us living in Montenegro, but very important for people from large businesses who want the service, but also the safety and comfort of staying on the mountain or the sea," said Pejakovic.
He argues that the fact that the deposit portfolio is larger than the credit suggests such a conclusion that there is not much room for dealing with traditional banking affairs of receiving deposits and giving loans. The Montenegrin Commercial Bank, which reported half of the current year with the largest share capital of EUR 137 million, said the stability of the banking sector is the most important.
"We agree that the stability of the banking sector in Montenegro is paramount. Commercial banks need not only stable and strong banking but also professional support. As a regulator, the Central Bank will, in the light of the preservation and enhancement of the stability of the financial system, assess the needed level for support to be provided in order to obtain the aforementioned," said CKB to “Pobjeda”. In the consolidation process of the international money market and the capital markets, Montenegro, it is considered in this bank, is getting closer and more open to these markets.
"It is important to know that this is a riskier business for clients, requiring knowledge, information and transparency. Some banks in Montenegro, which operate within the international banking groups, already provide these services. CKB, as the first bank in Montenegro, started providing this service through private banking and investment services in 2009, continuously improving all investment services and products," they explained.
The CKB says they agree with the assessment that the space for dealing with traditional banking deals is limited due to the high competition and the lower margins, but...
"However, we believe that competition is not only in this segment, but also in the quality of service and operating costs the bank manages. Traditionally, bank loans and receipt of deposits remain the core of the banking sector's business with an even higher quality of service. High quality service with the optimum cost structure will provide extra income and therefore the viability of banks' profitability," added the bank.
Text by Pobjeda, on September 12th 2018, read more at CdM