Macedonian banking system remained stable, maintaining high solvency and liquidity despite uncertainty of the EU debt crisis. Stress-tests have shown that Macedonian banks would sustain even the worst-case scenarios, concluded the Financial Stability Committee, which reviewed Tuesday latest trends in the country's banking system.

"The Macedonian banking system demonstrates exceptional stability. Capital adequacy has increased by 17.5 percent, whereas the highly liquid assets in the total assets of the banking system has reached 31.5 percent in the first quarter of 2012", said National Bank of the Republic of Macedonia (NBRM) Governor Dimitar Bogov.

He added that stress-test simulations have shown that even in the worst-case scenarios, the Macedonian banking system does not reduce the capital adequacy, i.e. no bank lowers the capital adequacy under the legal minimum of eight percent.

Vice Premier and Finance Minister Zoran Stavreski said it was good that even in circumstances of increased risk in European economy, the country's banking system has remained stable, accompanied by rising deposits.

"This confirms the high liquidity of banks and capital adequacy rates, which on the other hand demonstrates that a good share of the banks' capital can be used towards increasing the credit activity for properly targeted projects that would help the Macedonian economy and citizens in overcoming the situation resulting from the European developments", stressed Stavreski.

The Committee has concluded that the Macedonian banking system is almost non-dependant from outside financing sources, which minimizes the threat from spillover of current crisis events in the euro zone to the domestic banking sector.

NBRM and Finance Ministry data show that banks' activities have continued to rise in the first months of 2012, similar to the dynamics in the course of 2011. Deposits have reached Denar 237 billion (EUR 3,86 billion), increasing by 9.8 percent compared to the same period last year. Moreover, credit growth has increased by 8.3 percent.

The Committee has concluded there is certain increase of credit risk, but the conservatism and caution of regulations and banks secure complete coverage of "bad" credits through allocated reservations. The share of non-functional loans in total credits by the end of Q1 amounted to 9.9 percent.