Montenegro is a small country in Southeastern Europe, classified by World Bank as upper middle-income country. This country is a service-oriented economy transitioning to a market system. Since 2002 Montenegro uses euro as its domestic currency unilaterally, though it is not an official member of the euro zone.
Banking sector of Montenegro is characterized by relatively small size, small number of banks with wide business focus, high degree of concentration and high share of foreign capital.
In 2016 there were 15 banks operating in Montenegro, including 5 domestic banks and 10 foreign-controlled banks. The foreign-controlled banks are originated from different European countries (Austria, Hungary, Italy, Serbia, Slovenia, Azerbaijan, France, Ukraine, Turkey).
Banking sector of Montenegro is highly concentrated: 5 largest banks comprise together about 65% of consolidated banking assets, each of the banks has market share of more than 10% of total banking assets. All of these banks are foreign-controlled.
Banks in Montenegro operate as universal banks, providing a broad range of retail (savings products, current accounts, payment cards, consumer and business loans) and corporate banking (letters of credit, guarantees) products and services.
Investment banking solutions are provided by 3 banks (Hipotekarna banka AD Podgorica, Invest banka Montenegro AD Podgorica, Prva banka Crne Gore AD Podgorica) include securities trading and custody services. Private banking is offered only by Crnogorska komercijalna banka AD Podgorica.
During the recent years, banks in Montenegro have been attracting deposits from both Montenegrin residents and non-residents, from both natural persons and legal entities. Non-resident deposits account for about 20% of total deposits, while deposits of foreign companies – about 10% of corporate deposits. Loans to non-residents comprise about 2-3% of total loans.
However, there are also several drawbacks in offshore banking of Montenegro:
11 banks (ouf of 15) offer non-resident accounts, usually to both natural persons and legal entities.
Normally, the banks require the following documents to open a non-resident account for a natural person:
Montenegrin banks do not allow online account opening, and it’s necessary to visit a branch of the chosen bank; all of the banks provide online banking services to access the account.
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