Montenegrin microfinance organisation Kontakt is the sole institution, which has so far requested from the central bank in Porgorica an authorisation to set up a bank - even though Turkey'sZiraat Bank has been also anticipated for some time now to apply for a similar permit, Portalanalitika.me reported on Feb 21.
The report is based on information of daily Dnevne Novine from the central bank CBCG. According to it, Kontakt submitted its request at the end of 2013 and the central bank is in a process of evaluating all relevant facts in order to decide on the request. CBCG also said it has not received any similar application from Ziraat, adding the Turkish lender has only sent a letter of intent, which is of no binding character.
Under the law, a bank in Montenegro can be set up only as a joint stock company as the cash part of its shareholder capital cannot be less than EUR 5mn, the report said.
It adds more details on the ownership of Kontakt, alleging the firm is linked to the former manager of OTP's local unit Crnogorska Komercijalna Banka - Milka Ljumovic, who has been under investigation by the local authorities for suspected irregularities in credits approval. However, the report says, Ljumovic is no longer in Kontakt's executive board but her brother - Miodrag Perovic, is there. Perovic, on the other hand, is known as an owner and founder of local dailies Vijesti and Monitor.
According to Kontakt's latest financial statements posted on the central bank's website, it cut its loss to EUR 13,000 in the first nine months of last year from EUR 63,000 in Jan-Sep 2012.
A total of 11 banks and six microfinance institutions are active at present on the Montenegrin market of some 620,000 people.
In November 2013, the Montenegrin finance ministry said Turkey's state-owned Ziraat Bank had decided to enter the tiny Balkan state, aiming to support small and medium-sized enterprises (SMEs) as well as large-scale investment and development projects. The bank is said to also intending to serve the needs of Turkish investors coming to Montenegro. One of the largest investors already active in the Adriatic country is Toscelik, which acquired troubled steel mill Zeljezara Niksic in 2012.
Media reports from mid-2013 talked about Ziraat Bank holding talks to buy Montenegro's Prva Banka, controlled by the brother of PM Milo Djukanovic – Aco Djukanovic.