Progress in implementing reforms and ensuring political stability are some of the challenges for the new government in order to ensure a stable and predictable environment for attracting investors, said the chairman of the Board of Directors of Addiko Bank, Christoph Schoen.
Commenting on the investment environment in Montenegro, he said that in the last few years we have seen a slowdown in reforms and some challenges when it comes to political stability.
“It is not a good environment for investors. They seek stability and predictability. And I think that in this respect the new government has some challenges ahead of it in order to provide a stable and predictable environment for attracting investors”, said Schoen in an interview.
Speaking about Montenegro’s perspective and key challenges, he said that the past years were difficult, but that it must also be recognized that Montenegro is in the process of democratic transformation.
“I think it’s a good and encouraging sign that this transformation is being realized in a peaceful way,” Schoen believes.
He stated that, nevertheless, the progress in joining the EU has been slow.
“I hope that with the new government we will again have a bit of wind behind us in terms of implementing reforms, and give signals to investors and citizens that the government takes EU accession seriously and that we see progress,” said Schoen.
This, he believes, is extremely important for attracting foreign investors and stimulating the economy in general.
Commenting on the banking sector in Montenegro, Schoen said that it has shown high resilience in recent years.
“The Covid crisis and also the war between Russia and Ukraine brought enormous challenges to the banking sector and the entire economy. Together with the Central Bank and the measures taken, I think that the banking sector performed very well and supported the economy in this difficult situation”, said Schoen.
He said that we currently have a very favorable situation when it comes to liquidity on the market.
“A lot of funds are coming, especially from Russia and Ukraine. Now the question will be whether these funds will remain in the country, whether we will find attractive projects and investment opportunities in the country, or whether they will leave the country again, which I hope will not happen”, said Schoen.
When asked about expectations regarding interest rates, Schoen replied that this is a consequence of the current economic situation in Europe.
“Inflation is still very high in significant parts of Europe and Euribor is still increasing. How it will develop further, I cannot predict, and in Montenegro we see a high level of inflation, which unfortunately affects the citizens very much, and we are watching this situation carefully”, said Schoen.
He believes that the banking sector is ready to react accordingly.
“Whether interest rates will continue to rise or not is really hard to predict at this point,” added Schoen.
Schoen said that seven years ago, when they launched the Addiko brand, they embarked on the path of change from a universal to a specialized bank.
“We strive to become number one in the market in terms of consumer and small and medium-sized business lending,” said Schoen.
He reminded that last year they achieved the best result in the bank’s history, with a net profit of EUR 3.9 million.
“In addition, other financial indicators show that the strategy is working very well, that we have gained trust in the market and that, with our specialized role, we have positioned ourselves as a stable part of the banking sector,” added Schoen.
At the moment, he could not yet specify the bank’s business results at the end of the first half of this year, although the bank made a profit of EUR 1.5 million in the first quarter.
“Net profit is not the only indicator we observe, so I still cannot say what the bank’s half-year results are, but we are confident that we will have a successful year. We focus on many indicators that prove the business model is working, such as a growing client base and liquidity and risk ratios.
Therefore, net profit in itself is not the only indicator that determines whether we are successful or not, but we hope for a successful year as well”, stressed Schoen.
Addiko bank presented a new image and repositioning of the bank a little more than a year ago. Schoen announced that they are satisfied with the reaction of clients and with the fact that they are recognized as a specialized bank.
He explained that two indicators support this.
“On the one hand, we reached a market share in new cash loans of 15 percent, which is a great result considering the size of the bank. On the other hand, we succeeded in having 80 percent of our consumer loans generated through digital channels, and this is a confirmation of our investments in digital channels, as well as that the path we have taken is the right one,” said Schoen.
When asked what the plans are when it comes to the further positioning of the bank, Schoen replied that, as in the previous few years, they will continue to work on improving processes and investing in digital channels, in order to provide clients with the best possible user experience.
“Our goal is to provide financial services in our key segments – consumer and SME lending, wherever and whenever our clients need it. And we strive towards those goals”, concluded Schoen.
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