Skopje, 27 December 2023
The banking sector remains safe and sound - the Council has made a decision to further strengthen its resilience
Two meetings of the National Bank Council were held on 21 and 27 December. The National Bank Council adopted the Report on the risks in the banking system of the Republic of North Macedonia in the third quarter of 2023. In addition, the Council made a decision to increase the countercyclical capital buffer for preventive actions and further strengthening of bank’ resilience.
According to the Report on the risks in the banking system in the third quarter, the risk exposure indicators of the banking sector are stable and further improved, while the stress tests indicate a solid capacity to deal with possible shocks. The environment in which the banks operate features gradual stabilization of the price growth and favorable foreign exchange market, with existing risks and uncertainties, mainly caused by external factors. Therefore, the Report highlights the need for further cautious risk monitoring by both banks and the National Bank and if necessary, taking measures. In such conditions, banks continue to carry out their activities, although there is a certain slowdown in lending and deposit activities, but the growth is still solid. Both currency and deposit maturity also registered favorable changes. The bank solvency improved, with a capital adequacy ratio reaching 18.4%, which is the highest level in the past seventeen years. The quality of the banks’ credit portfolio is solid and so far shows no signs of significant credit risk materialization, while the share of non-performing to total loans of 2.8% is at the historic low.
On the basis of the regular quarterly systemic risk assessment, which includes data on the third quarter of 2023, including the latest indicators, the National Bank Council adopted a decision to increase the rate of the countercyclical capital buffer for exposures of the banks in the Republic of North Macedonia by 0.25 percentage points, from the previously determined 1.25% to 1.5%, applicable in the first quarter of 2025. For the purpose of further strengthening of the banking system resilience, in the absence of materialization of risks to the balance sheets of banks and solid profitability, the National Bank increased the level of countercyclical capital buffer during 2023, on several occasions.
The National Bank Council also discussed several other issues related to the central bank current activities.
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