The Central Bank of the Republic of San Marino announces that on May 31 a Shareholders’ Meeting was held, attended by Marco Gatti, the Secretary of State for Finance and Budget, and Roberto Ciavatta, the Secretary of State for Health and Political Affairs, representing the Esteemed Chamber. The meeting also included representatives from the banks participating in the endowment fund.
During the Assembly, the following resolutions were adopted:
- Approval of the Annual Report for the year 2021;
- Approval of the "Final Report on the activities carried out and the performance of the financial system 2021."
The unanimously approved Financial Statements for the 2021 FY, CBSM reveals that total assets increased by €87.53 million compared to the previous fiscal year, rising from €749.38 million to €836.9 million.Concerning the key balance sheet items, there has been a rise in both deposits and loans.
In the 2021 FY, the gross operating result recorded negative values amounting to -€4.32 million, compared to a negative result of -€0.8 million in 2020. This decline was primarily due to a contraction in the interest margin and fluctuations in profits and losses from financial operations. The aforementioned decrease in results was mainly influenced by the dynamics of short-term interest rates, which remained at negative values, alongside the trends in longer-term rates.In relation to administrative expenses, it is noted that in 2021, the bank continued its efforts to implement a "cost rationalization project" aimed at streamlining management expenses. This initiative involved both a reduction in personnel costs, achieved through a three-year collective agreement signed in 2019 with employees, and the adoption of a budget that stipulated a 25% decrease in other administrative expenses compared to 2018. As a result of this project, operational costs saw a reduction of €0.12 million in 2021 compared to the previous fiscal year. Notably, the category most impacted by this contraction was “other administrative expenses,” which decreased by €0.11 million.
In comparison with the same data from 2018, the reduction in management costs achieved in 2021 amounts to €2.88 million. These results highlight the efforts made by the Institution since 2019 to minimize structural costs. As a result of the dynamics of the aforementioned items and the outcome of extraordinary management (positive at €5.94 million), the final net operating result stands at €1.27 million. However, the fiscal year concludes with a balanced result due to the allocation of an equal amount to the general financial risk reserve.
The Shareholders' Assembly has approved the “Annual Report on Activities and the Financial System Performance for 2021.” This report outlines not only the performance of the financial system over the past year but also the activities undertaken, highlighting the significant and tangible contributions of all stakeholders. These efforts enabled the system to overcome various challenges and embark on a new development path, fully compliant with international regulations and standards, as well as best practices in financial system supervision and management. In this context, it is noteworthy that the credit market experienced significant events throughout 2021, which impacted the structure of the banking sector, its technical profiles, and the dynamics of intermediary volumes, including:
- the completion of the resolution procedure of Banca Nazionale Sammarinese S.p.A. (BNS) resulting in its transformation into an Asset Management Company, formerly BNS S.p.A. (SGA), which occurred on July 15, 2021;
- the capital strengthening measures undertaken by the State in relation to Cassa di Risparmio della Repubblica di San Marino;
- the reduction of the Mandatory Reserve Ratio (ROB) established by banks at Banca Centrale di San Marino (CBSM);
- the reallocation of part of the deposits held by an institutional entity at the Central Bank in favor of the banks;
- the inclusion in indirect funding, starting from the third quarter of 2021, of bonds originally issued by Banca Nazionale Sammarinese S.p.A. that are present in the securities portfolios of the banks' clients.
Finally, the Central Bank has introduced two chapters in its annual report. The first emphasizes "policy recommendations" concerning the findings of analyses conducted by the International Monetary Fund. The second focuses on "consulting and collaborations" that the Bank provides to third parties, particularly for Public Administration and international organizations, highlighting the significance of this activity in the operations of CBSM.
The Secretary of State for Finance and Budget, along with the Board of Directors of the Central Bank, wishes to extend heartfelt gratitude to Attorney Giuseppe Ucci on the occasion of the closure of his final financial statement with CBSM. We acknowledge the collaboration and support he has demonstrated throughout these years, resulting in excellent outcomes. Although this partnership is approaching its conclusion, it has significantly contributed to the professional and beneficial growth of the Institution. The complete texts regarding the “2021 Financial Statements” and the “Final Report on Activities and the Performance of the Financial System of 2021” are available.