Despite its tiny size, Montenegro remains a profitable and highly competitive banking market. The Balkan state’s largest lenders all posted strong results last year, with subsidiaries of both Société Générale and Slovenia’s NLB Group notching record net profits.
However, it is NLB Banka that wins the award for best bank in Montenegro thanks to its impressive growth, superior efficiency and progress on innovation.
Ranked fifth in Montenegro by total assets, with a market share of 11.1%, the lender more than doubled its return on equity to 14.9%.
This was driven partly by lower net impairments and provisions – non-performing loans fell 2.8 percentage points during the year to 5.2% – but also by rising revenues. Net interest income rose by 9.9% thanks to double-digit growth in retail lending, while non-interest income was up 12.9%.
A new ‘super-fast cash loan’ product, offering five-minute decision-making in-branch or via Viber, proved particularly popular with Montenegro’s retail borrowers.
On the corporate side, NLB Banka coordinated the first joint cross-border financing with its parent group for a real estate development project on the Montenegrin coast.
Combined with a 0.6% reduction in operating costs, the jump in net profit brought NLB Banka’s cost-to-income ratio down to a sector-beating 51.8%.
Capitalization meanwhile remained comfortable, with the overall capital adequacy ratio increasing by 1.3 percentage points in the 12 months to the end of December to 16.2%.