During the months of March, April and May 2009 deposits in banks operating in Albania have shown a very slow increase, reports the local press (Korrieri, 1.07.2009) revealing data released by the Albanian Association of Banks. The overall deposits in Albanian banks have grown by only 8.8 million Albanian Lek련ALL), or nearly 90,000 US Dollars (USD). That would mean an average progression pace of nearly 2.9 million ALL per month (or nearly 29,300 USD). This moderate overall growth is spread over a total of 16 banking entities operating in Albania and which have joined the Albanian Association of Banks.
This progress is certainly uneven among banks (some banks may even have experienced contractions of deposits) and refers to the banking system as a whole. The theoretical average growth for each of the banks would be of only 181,250 ALL per month or nearly 1812.25 USD. This makes the increases look like a day at the snail races.
March 2009 April 2009 May 2009
Deposits in Albanian Lek (ALL) 634.5 637 643.3
Source: Korrieri, 1.07.2009, Realization: A. P.
Turning deposit reductions into deposit increases
Though the growth of the deposits over the past three months has been very slow, it is the first time in a few months that such a growth is taking place. According to experts from the Bank of Albania, (the Albanian central bank), quoted by Korrieri, “since October 2008, the month of March 2009 is the month registering the lowest decrease in deposits.” With 634.5 million ALL, the month of March 2009 is reported to be 2.5 % lower in deposits made than the end of last year.
Since April 2009 a slow-paced growth of deposits has been observed. Experts from the Bank of Albania assess that deposits in the national currency, the Albanian Lek (ALL), are the deposits that have shown the best rate of increase. For the operating period from the 1st of April to the 8th of June the deposits in ALL are reported to have progressed by 3 %, while deposits in Euro and US Dollars (USD) have progressed by only 0.2 % and 0.3 % respectively.
Korrieri reminds that the Albanian government has, during the first months of 2009, raised coverage of deposits up to 25 million Albanian Lek련ALL) which the Albanian government guarantees to the depositor in case of failure of the deposit bank. Developments in the deposit record show this safeguard has not yet had the full desired impact.
The experts of the Bank of Albania (BoA) indicate that the slow-paced growth of deposits is mostly due to deposits from businesses rather than deposits by individuals.
