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NBRM: Banks’ activities reduced due to political crisis, economic slowdown

Banks in Q1 registered reduced activities by 1.6 per cent as a result of usual seasonal factors, a slowdown in economic activities, and also due to the risks stemming from the domestic political developments, the National Bank of the Republic of Macedonia (NBRM) concluded.

The NBRM on Thursday held a session to review and adopt a report on risks in the banking system in the first quarter (Q1) of 2017.

Q1 saw a decrease in the banks’ deposit potential, largely as a result on a decrease in corporation deposits, according to the central bank.

“Household deposits rose by an insignificant 0.2 per cent. The banks’ loan activity in Q1 2017 dropped after a decrease in loan support to the corporation sector and a rise in crediting of households. However, in times of retaining assessments as regards the stability of the domestic economy, expectations of business subjects are being evidently stabilized, which enabled in January and February 2017 the National Bank to continue to normalize its monetary policy,” read the press release.

In the first three months of 2017, liquidity of banks marked a moderate decrease, which in part comes as a consequence of the factors of seasonal influence, but it also is a result of the effects of uncertainty over the domestic political state of play in this period on the sources of financing.

“Indicators of the profitability and efficiency of the banking system in general mark further improvements and stand at a solid level,” stated the press release amongst other things.

Furthermore, results of stress-tests realized on 31 March 2017 have been improved compared to late 2016. They show banks have a satisfactory level of resistance to simulated shocks, the NBRM said.

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