The Shareholders' Meeting of the Central Bank of the Republic of San Marino, attended by the Minister of Finance and Budget, Hon. Marco Gatti, and the Secretary of State for Health and Social Security, Hon. Mariella Mularoni, representing the Chamber, along with representatives of the banks participating in the endowment fund, has today approved the 2023 Budget, along with the Annual Report on activities and the performance of the financial system in 2023.
The Operating Budget for 2023, unanimously approved, shows total assets of €789.95 million, an increase of €129.81 million compared to the previous year (€660.14 million). Changes in the balance sheet, driven by the increase in sight deposits with short-term rate-indexed remuneration, led to greater exposure to the rising market interest rates that characterized 2023, which was not fully offset by the average returns recorded on investments.
However, the Financial Statements highlight a significant increase in interest distributed across the territory to systemic counterparties, reaching €9.46 million compared to €1.13 million in 2022 (+€8.33 million). Specifically, these interests were paid to the public administration for €1.82 million (compared to €0.49 million in 2022) and to San Marino banks for €7.64 million (against €0.64 million in 2022).
The negative Gross Operating Result recorded by CBSM, amounting to €4.57 million (compared to -€0.74 million in 2022), is mainly attributable to the decline in the interest margin (-€4.61 million compared to 2022), which negatively impacted the intermediation margin (€5.95 million in 2023), insufficient to cover operating costs (€10.51 million), which remained in line with the previous year.
As a result of the dynamics outlined above, the Final Net Operating Result was negative by €4.65 million. However, the financial year closed at break-even thanks to the use of the general financial risk fund for the same amount.
This result is set within an international context where many other Central Banks have reported significant losses due to the extraordinary rise in inflation rates and the consequent restrictive monetary policies, characterized by high interest rates, well above the average recorded in recent years.
"It has been an extraordinary year, with monetary policies that, while undoubtedly penalizing the financial result, have also allowed us to distribute substantial financial resources across the territory," commented Catia Tomasetti, President of the Central Bank of San Marino.
The Shareholders' Meeting also approved the Annual Report on activities carried out and the performance of the financial system in 2023, which outlines the financial system’s developments over the past year and the activities conducted by CBSM.
The banking sector’s situation reflects the positive results achieved in line with the strategic guidelines pursued by the supervisory authority, including:
- an increase in total deposits by €225 million compared to the same period in 2022;
- for the third consecutive year, a positive system-wide financial result totaling €28 million, with all credit institutions reporting profits (similar to 2022);
- the strengthening of banks’ capital resources by €26 million, bringing the total to €321 million.
The report also includes an in-depth analysis of the first system-wide securitization transaction, highlighting its clear benefits in terms of reducing the level of non-performing loans and the incidence of unproductive assets, thus fostering the recovery of the banking sector and its ability to support the country’s economy.
The complete texts of the "AnnualReport2023” and the "Final Report on the Activities Performed and the Performance of the Financial System 2023" are available.