Skopje, 14 March 2023 (MIA) – The collapse of the U.S. Silicon Valley Bank (SVB) has no direct impact on our banking system, considering the banks' small exposure to non-residents, but also the traditional business model based on lending to companies and citizens with stable sources of financing, said the National Bank of North Macedonia in a press release Tuesday.

The National Bank said that based on estimates from relevant international institutions, especially the U.S. regulators, the recent events in the U.S. banking system are not expected to impact the financial stability of the U.S., hence no significant effects on global financial stability are expected.

“The latest events in the U.S. banking sector will not directly impact our banking system, since our banks have a very low exposure to foreign countries, including the U.S. economy and banks, i.e., only 6.6 percent of the total liabilities of the banking system are abroad, and only 5 percent of claims are from abroad. Additionally, the balance sheets of our banks are exceptionally solid, with a high level of capital (the highest in the last decade), appropriate liquidity and excellent quality of the credit portfolio,” stressed the National Bank.

Our banking system, said the National Bank, has a traditional business model, based on lending to companies and citizens with stable sources of financing. This is very different from the business model of the U.S. bank, which is one of the key reasons for its collapse, and is based on a high concentration of both the deposit base and investments in securities (securities made up 60 percent of the total assets of Silicon Valley Bank).

“Our banking system has a diversified and stable financing structure in which deposits account for 84 percent of total liabilities, and two-thirds of the deposits belong to the population. These funds are mainly placed in loans to non-financial persons, which account for 60 percent of the total funds of the banks and which are of high quality. On the other hand, the shares of the banks’ investment in securities issued by non-residents is minimal and at the level of the banking system is below 1 percent,” the National Bank said in the press release. ad/sk/