Meeting of the National Bank Council

Skopje, 27 December 2024

The banking sector remains safe and sound, the National Bank Council adopted a decision to improve the regulation on identifying systemically important banks

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 2024. Also, the Council adopted a new Decision on the methodology for determining systemically important banks which improves the existing methodology on the basis of which the National Bank identifies systemically important banks in the country and determines capital buffer for them. This is a macro-prudential instrument for strengthening the resilience of the banking system by strengthening the solvency and stability of systemically important banks to unexpected shocks or losses that may occur during their operations. The decision on systemically important banks is subject to amendments for the purpose of further approximation to the Guidelines from the European Banking Authority (EBA) for identifying domestic systemically important banks.

According to the Report on the risks in the banking system in the third quarter, the risk exposure indicators of the banking sector remain stable, while the stress tests indicate a good capacity to deal with shocks. The capital adequacy ratio remained at 19%, which is the highest level in the last seventeen years, while the share of non-performing loans in total loans is at historically low 3%. In the third quarter of the year, banks operated in conditions of significant slowdown in the domestic inflation and favorable foreign exchange market, but the risks from the environment are still present and there is a need for their further close monitoring and vigilance in the policy conduct in order to maintain the stability of the banking sector also in the following period.

The growth of deposits from citizens and companies accelerated and maintained the credit growth, but also increased the banks' liquid assets. Moreover, the annual growth of deposits accelerated to 7.9%, which is predominated by long-term savings, and by denar deposits, driven by the National Bank measures for support of denarization and savings in the longer run. The annual growth in lending accelerated to 7.5%, while the results of the Bank Lending Survey in the third quarter of 2024 point to further net easing of the total credit conditions and net increase in the credit demand, in both sectors - companies and households.

The Council also adopted amendments to the accounting and financial reporting regulations for banks and savings houses to implement the requirements of the International Financial Reporting Standard (IFRS) 16 Leases and to align with the applicable IFRS, published by the International Accounting Standards Board.

The National Bank Council also discussed several other issues related to the operations and current activities of the central bank, and adopted the Financial Plan and the Investment Plan of the National Bank.