TIRANA, Jan. 17 – A new merger and acquisition between two small banks has reduced the number of commercial banks operating in Albania to 13, down from a decade of 16 until 2018 when two foreign-owned banks sold their Albania units to local rivals.
Albania’s competition authority says it has okayed the sale of the International Commercial Bank, the Albania unit of Switzerland-based ICB Financial Group Holdings with units also in Tanzania and Bangladesh, to Albanian-owned Union Bank, where London-based European Bank for Reconstruction and Development also holds a minority stake.
The merger, whose financial details have not been disclosed, does not have any major impact on the Albanian banking system as Union Bank will only gain a 0.7 percent market share to increase its share to 4.1 percent and remain one of the smallest commercial banks.
Locally known as the Malaysian bank, the ICB was one of the first commercial banks in Albania and has been operating for about two decades, but its Albania assets represented only 0.7 percent of total assets at the end of the third quarter of 2018 with only six outlets in the country’s three largest cities, according to the Albanian Association of Banks.
Meanwhile, Union Bank, whose majority stake is owned by Albanian investors, but where London-based EBRD also holds a minority 10 percent, has been operating in Albania since 2005 and had a 3.4 percent share in terms of assets in late 2018 with a network of 30 outlets in the country’s main cities.
The main Albanian investors in the bank also run the country’s largest money transfer company.
The new merger comes after the merge of Italy’s Intesa Sanpaolo and loss-making Veneto Banka Albania and the acquisition of the Albanian unit of the National Bank of Greece by Albanian-owned American Bank of Investments, reducing the number of commercial banks operating in Albania to 14.
Several other loss-making small banks operating in the country are also reportedly on sale as credit struggles to recover amid sluggish demand and a declining but still high level of non-performing loans of about 13 percent.
Experts say bank consolidation, the process by which one banking company takes over or merges with another, is expected to continue and further reduce the number of banks in the country, but at the same time not affect competition in a market where the four largest banks already hold more than two-thirds of total assets, at 68 percent at the end of 2017.
