The National Bank of the Republic of Macedonia Council held its tenth session today
The National Bank of the Republic of Macedonia Council held its tenth session today.
At the meeting, the National Bank Council discussed the Report on Risks in the Banking System of the Republic of Macedonia in the Second Quarter of 2014. The Council concluded that even in external environment full of great challenges, the banking system managed to maintain its liquidity and solvency, and therefore, its safety and soundness.
The growth of activities of the Macedonian banks continued during the second quarter of 2014, as a result of the increasing level of financial intermediation and support for the Macedonian economy. Deposits of households are considered generators of the growth of banks' funding sources, particularly the growth of households' denar deposits with greater contractual maturity, which is a direct reflection of the confidence that banks have domestically. Moreover, the recovery of domestic economic activity and the gradual increase of banks' risk appetite, made the annual growth of loans to non-financial companies accelerate for three consecutive quarters. The growth in lending was slightly more pronounced in loans to households, with acceleration of the annual growth of credit support to the corporate sector.
In the first half of 2014, the profit of the banking system tripled compared to the same period in 2013. The main factor behind the improvement of banks' profitability indicators was the decrease of expenditure components, both the interest expenses and the impairment of financial assets that reduced primarily due to the lower six-month growth rate of non-performing loans.
Credit risk remains the most common risk in the banking system of the Republic of Macedonia, but the full coverage of non-performing loans with total impairment reduces the risk of non-collectability to the banks' solvency. The solvency of the Macedonian banking system is stable and with a capital adequacy ratio which is two times higher (16.9%) than the capital requirement. Liquidity indicators are satisfactory, and the liquid assets allow high coverage of household deposits.
The high and stable solvency of the banking system and banks' liquidity contribute to the resilience of the banking system to liquidity and credit shocks simulated during the stress testing that the National Bank carries out on a regular quarterly basis.
At today's session, the Council, taking into account the schedule and dynamics of activities of issuing collector coins, adopted the Decisions on issuing collector coin "Aquarius" from the "Zodiac" series. Thus, 7000 pieces of collector coin "Aquarius" will be issued in denomination of 10 denars.
The Council also considered other matters within its jurisdiction.
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