The Report on the Risks in the Banking System for the second quarter and the Annual Report for Oversight of the Payment Systems Operations in 2020 were adopted

Skopje, 1 October 2021

At the session of the National bank Council held yesterday, the Report on the Risks in the Banking System for the second quarter of 2021 was adopted. The operating conditions of the banking system remained uncertain, although less pronounced, due to the improved epidemiological situation and the subsequent lifting of restrictive measures, which had a favorable impact on domestic economic activity. In such conditions, the banks’ credit activity registered quarterly growth, which was mostly a result of the increased lending to households, given solid positive contribution of corporate borrowings, as well. The household and corporate deposits registered accelerated growth, as well.

The solvency of the banking system improved. At the end of June, the capital adequacy ratio equaled 17.3%, which is by half percentage point higher compared to the end of the previous quarter of the year.

In the second quarter of 2021, in conditions of further growth of the liquid assets of the Macedonian banking system, the liquidity indicators remained stable and on satisfactory level. On 30 June, 2021, the liquidity coverage ratio of the banking system was 184.2% (the regulatory minimum for this rate is 100%).

The share of non-performing loans in total loans in the second quarter of the year was low and remained at the same level as in the previous quarter of 3.5%, i.e. 5.1% in the corporate loan portfolio and 2% in the household loan portfolio.

According to the Report data, the domestic banking system continues to operate profitably, which is especially important for maintaining the banks' capital position, i.e. their stability and resilience.

The Council also reviewed and adopted the Annual Report on the Oversight of the Payment Systems Operations in 2020 and the implementation of the given recommendations. The National Bank assesses whether the structure and functionalities of the payment systems according to their importance are in accordance with the regulatory requirements for their smooth, safe and stable operation, which are also in line with the international standards for the operation of the payment systems.

The results of the monitoring during the last year show that the payment system operators in the country have established infrastructure, policies, rules and operating procedures that enable safe and smooth execution of payments through the systems they manage, and have appropriate controls for dealing with internal and external sources of operating risk. The assessments of the Report confirm that the payment systems in the country consistently provide a high degree of security and operational confidentiality, which is a significant contribution to creating a favorable economic environment for both businesses and the population. The availability of payment systems during the last year was at a high level of over 99.9%.