At the end of July, total deposits in Montenegrin banks hit a record €5.89 billion, up around €340 million from the same period last year. Total approved loans also reached a record €5.3 billion, an increase of €740 million over the past 12 months.
Citizens held €2.26 billion in bank deposits, a €300 million increase year-on-year, while domestic businesses increased deposits to €1.76 billion. Public institutions raised deposits from €453 million to €530 million. Only 17% of citizen deposits were term deposits, with average interest rates ranging from 1.4% to 2.5%. The average effective interest rate on loans in July was 5.91%.
Non-resident deposits fell by €180 million to €1.17 billion, reflecting increased foreign investment outflows from €177 million to €213 million over six months.
Cash loans grew significantly, with banks approving €378 million from January to July, a 43% increase over last year. Housing loans also rose to €126 million, with interest rates falling from 5.56% to 5.26%.
The rise in deposits reflects trust in the banking system, tourism inflows, remittances, and foreign investments. However, experts note that much of the deposit money is idle, earning low interest below the current 4.5% inflation, while local investment opportunities remain limited.
Montenegrin citizens’ deposits now represent roughly 75% of the national GDP, exceeding public debt by €1.7 billion. This level of deposits could theoretically finance large-scale infrastructure projects, such as 325 km of planned highways, equivalent to 65% of Montenegro’s proposed road construction.
