The banking activity expanded during 2011 reaching a total number of 552 outlets and agencies (compared to 548 in December 2010), and enhancing the financial infrastructure through the deployment in the country of 34 new ATMs and 223 new points of sale
TIRANA, March 13 – The assets of the banking system at the end of 2011 reached a total of 1.120 billion lek묠scoring an annual growth of 13.1% or about 130 billion lek묠higher than the increase by 11.8% in 2010, says the Albanian Association of Banks. In 2011, banks’ assets reached at 85% in relation to the GDP, a higher level than a year ago (81%), indicating the deepening of the intermediation activity of the banking sector and a greater support to the economy from this sector.
The loan portfolio of banks increased during 2011 by 15.3%, reaching 566 billion lek롡nd representing 51% of the assets of the system. The final quarter of the year was characterized by a greater involvement of banks in financing the private sector, increasing lending by 4.4%; the highest growth compared with the three other quarters of the year. Corporate loans increased by 21.6%. The most credited sectors of local businesses are the services and industry sectors, which are also the sectors with the best performance over the last two years.
The level of non-performing loans reached 18.8% in December, affected not only by the difficulties in determined sectors of the economy, but also by the slowdown in credit growth rates in the last 2-3 years. With the deterioration of quality of their loan portfolio banks have become more cautious in selecting the projects to be financed. Nevertheless, growth rates of nonperforming loans ratio have been dropping, marking the lowest growth by 0.4 percentage points in the last quarter of 2011.
As a result of the increase of nonperforming loans and in compliance with the regulatory requirements of Bank of Albania, banks have increased their provisioning funds, which have significantly affected the net result of the banking activity and the profitability indicators of the system, that resulted lower compared with the previous quarter.
The ratio of capital adequacy increased to 15.6% at the end of December (from 15.4 % last year) indicating the strengthening of the banking system’s capitalisation and confirming its stability. The sources of finance to the banking activity increased during the year both because of the injection of equity capital and because of the growth in deposits. Although at a slower rate over the last quarter, the deposits of banking system reached a total of 924 billion lek묠with an annual growth of 13.1%. Deposits of individuals had an increase of 15.3% compared to December 2010, a stable growth throughout the year, influenced by the orientation of customers towards savings and the strengthening of their confidence in the banking sector.
The banking activity expanded during 2011 reaching a total number of 552 outlets and agencies (compared to 548 in December 2010), and enhancing the financial infrastructure through the deployment in the country of 34 new ATMs and 223 new points of sale (POS) throughout the year. Usage of credit and debit cards has increased over the year, in response not only to the better acquaintance of the public in this regards, but also as a result of the policies of banks to reduce maintenance and usage costs of these cards.
