Demand for many goods and services has fallen dramatically, whilst it rocketed for others leading to shortages in supply. Borders are being closed and entire societies are changing their "life as usual". Uncertainties about the future are hitting most of the market players, with financial institutions globally not being an exception.

Banks have an extremely responsible role in the society, as seen from different aspects:

• Protecting their own people
• Being supportive and responsible to their community
• Understanding the issues and being supportive to their clients
• Maintaining their own solvency in hard times.

While no-one yet knows how the pandemic will evolve, we do know that we have faced similarly significant challenges before. The financial crisis of 2008 brought extraordinary challenges. Many businesses, those that engaged their people, and took prompt collective action in response to this crisis, went onto thrive.

The consequences of the pandemic for our global economy and financial sector are unpredictable. Economists are convinced that we are heading for a significant economic downturn and, depending on the duration of the pandemic, potentially a serious global recession.

Governments, politicians, regulators, supervisors and other decision makers are responding to the latest news on the pandemic. The response and measures of the Government of Montenegro are expected and will be communicated in our future communication.

Our Risk consulting team will keep assessing and informing you how banks are affected by this crisis.

Kind Regards,
KPMG Risk Consulting Team