Report on the risks in the banking system for the third quarter of 2021 was adopted

Skopje, 30th of December 2021

At its meeting held today, the National Bank Council adopted the Report on the risks in the banking system for the third quarter of 2021. Banks also in the third quarter of 2021 operated in conditions of a pandemic. Besides the uncertainties due to the pandemic, in this period the risks associated with the disturbance of the value chains and the volatility in the primary commodities markets, were also pronounced. In conditions of maintained macroeconomic stability, the growth of deposits and loans in the third quarter of the year continued. This quarter was also marked by the completion of the process of the acquisition of one bank by another, which reduced the number of banks and enlarged the banking system.

The solvency of the banking system remained at a stable level. The capital adequacy ratio is unchanged compared to the end of June this year and equals 17.3%. The results of the conducted stress-testing of the resilience of the banking system to the simulated shocks indicate a satisfactory resilience.

In the third quarter, liquidity ratios remain at a solid level. At the end of September, the liquidity coverage ratio of the banking system was 277.7%, which is almost three times more than the regulatory minimum (100%) and confirms the solid volume of liquidity available to the Macedonian banking system.

Despite the prolonged pandemic, the quality of the banks’ loan portfolio registered no major changes. In the third quarter of the year, the share of non-performing loans in total loans is at the level of 3.6%, or with a minor quarterly increase of 0.1 percentage points. Observed by sector, the growth of non-performing loans was concentrated in household loans, which caused a slight deterioration in the rate of non-performing loans for this portfolio to 2.2%, while non-performing corporate loans decreased and are at the historically lowest level (5.1%).

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 and further support to the economy.

The risks in relation to the pace of growth of the economic activity and the activities of the banking system in the next period are largely associated with the further developments with respect to the health crisis, but also with the disturbances in the global value chains, as well as with the current energy crisis. The National Bank will continue to carefully monitor the situation and will appropriately take measures, when necessary.

At its meeting, the Council also adopted the Annual Financial Plan, the Annual Investment Plan and the Annual Public Procurement Plan for 2022.

The Council has also discussed other matters within its jurisdiction.