From Annual report 2015


Dear clients, partners, and shareholders,

On behalf of the Board of Directors, I have the honour to present to you the Hipotekarna Bank AD Podgorica 2015 Annual Report.

Throughout 2015, the macroeconomic environment continued to show the effects of the European Central Bank expansionary efforts and did not offer much support to the economy, with low interest rate levels and slow economic growth rates continuing. In the time ahead, Montenegro’s banking sector will continue to face serious challenges caused by global uncertainty of not only economic, but increasingly of political and regulatory nature.

Confident about our progress despite macroeconomic challenges over the previous years, we managed to increase the bottom line across all our business segments. Our growth was continually faster than that of the remaining Montenegrin banking market and, as a result, our market share grew to over 10%. Our net profit rose to € 2.729 million, with the rate of return on equity at 7.93%, which is testimony to our capacity to strengthen key performance indicators even against a challenging environment. By maintaining a high solvency ratio of 12.85%, we demonstrated quality asset and liability management using new instruments in our balance sheet, as well as disciplined risk management, which serves as another indicator that the Bank strives towards achieving its strategic goal - a sustainable and successful business for many more years to come.

These are the best results ever since 2006 and give us confidence that we are on the right track to deliver on our targets.
The previous year saw a number of significant changes. To reduce the gap between our results and objectives further, we continued reviewing all our business segments to identify new options for improving our customer satisfaction. As part of this review undertaken, we confirmed our commitment to the universal bank model through a fundamental redesign or our business organisation in order to draw a clear line between our revenue generating activities and our business support activities.

Our progress in 2015 primarily came as a result of hard work and commitment of our workforce across the organisation. We recruit, train and motivate distinctive, ambitious and competent people who fight for the success and growth of the Bank. Committed to maintain our progress, achieve our strategy and grow into a more successful and efficient bank, we will continue using our expertise and creative innovations in order to win a status of one of the most reliable financial partners in Montenegro.

I would like to thank all our clients, employees and shareholders and express my heartfelt gratitude for your continued loyalty and trust.

Sigilfredo Montinari
Chairman of the Board of Directors


Dear clients, partners, shareholders,

It is my honour to present to you the Hipotekarna Bank AD Podgorica 2015 Annual Report.

2015 saw economic growth in almost all the leading economies of the world, slightly less so in the European Union member states. Increased liquidity had a tangible impact on Montenegro’s banking sector balance structure through enhanced potential of local banks.
Drawing on the experience in the past, it must be stressed again that Montenegro’s banking sector remained stable last year and that given the overall economic environment in the country it enjoys an outstanding position. As the banking sector stabilised, the competition increased. Following a number of years of unchanged number of actors, the market competition improved as the sector announced the arrival of both foreign and domestic banks, some of which already operating in 2015.

The Hipotekarna Bank AD Podgorica total assets increased by 40%, deposits expanded by 49%, with the loan portfolio going up by 31% and the investment securities portfolio by 150% over the previous year. Since all the relevant business parameters saw a continuous growth from 2006 on, we realised that as our position in the market changed, we needed to change as well. A growing Hipotekarna Bank AD Podgorica needed to reorganise the structure and optimise its business processes in the new environment so as to improve efficiency of the business model and preserve a deeply rooted organisational culture.

As a result, 2015 was the best business year ever of Hipotekarna Bank AD Podgorica by many indicators.

Our priorities, the safety of our clients as well as the best and most inventive services that we are known for in Montenegro’s banking sector, will remain unchanged in the coming period. There is unwavering evidence of the confidence citizens and companies have in Hipotekarna Bank AD Podgorica. We will continue to invest in our employees, develop technological processes in order to improve our performance in all the key business segments, and see our bank grow further.

Finally, let me avail myself of this opportunity and thank, on behalf of Hipotekarna Bank AD Podgorica management, and my own behalf, our clients, shareholders and employees for their support, perseverance and loyalty in record breaking 2015.

Esad Zaimović
Chief Executive Officer