TIRANA, Sep 16anks in Albania have experience liquidity problems during the last year because they have received little or no support from their mother banks or other non residential financial institutions. 16 out 17 banks operating in Albania are foreign owned or join ventures with 90% of all banking capital being foreign. The lack of fincing from home headquarters seems to be one of the main reasons explaining the tightened lending conditions applied by banks in Albania during 2009 despite the economy giving no clear signs of a slowdown or suffering and blows from the global economic crisis.
The latest observation came from the Bank of Albania (BoA) in a report drafted by BoA’s Supervising Council.
“One important source of financing for affiliates or branches of foreign banks in Albania are loans that can by provided by the mother bank, other sister banks, or different non-residential financial institutions. During the second quarter of 2009, the in family financing dropped by 20 billion Lek, or 20%,” reported the bank.
In family liabilities dropped to 7% in the second quarter from 9.2% that it recorded in the previous one. The shortage in such source of internal financing was partially balanced by increasing deposits during the 2nd quarter of 2009 as people regained their faith in the banking system. Yet, the decrease in internal financing seems to have created enough liquidity problems for banks which founded it difficult to ease its lending to economy causing repeated protests from businesses, individuals and authorities alike, who accused the banking system of holding back one of the fastest growing economies in Europe
