TIRANA, Oct. 27 – Subsidiaries of Greek banks operating in Albania lost considerable ground in the Albanian banking system in the past six crisis years affected by spillover effects from their parent banks in Greece which has seen its economy contract by a quarter during its prolonged recession fuelled by a debt crisis.
A report published by the country’s central bank shows the remaining three subsidiaries of Greek banks operating in Albania saw their assets drop to 14.4 percent in the Albanian banking system in mid-2015, down from 25 percent in 2008 just before the onset of the global financial crisis when four subsidiaries of Greek banks operated in the country. The situation is also a result of the acquisition of Emporiki Bank from France-based Credit Agricole in 2010. Earlier this year, the same unit was recently acquired by U.S.-based NCH Capital Inc, private equity and venture firm.
Their share in the total lending has seen a sharper decline, with credit in mid-2015 accounting for only 16.8 percent of the total, down from 35 percent in 2008.
The weight of deposits held by Greek bank subsidiaries in the Albanian banking system has also dropped to 14.6 percent fuelled by panic withdrawals from the situation in their parent banks.
The share of non-performing loans in the Greek subsidiaries although showing signs of improvements since 2013 continues, still remains at a high level of 35 percent, up from an average of 20 percent for all 16 commercial banks operating in Albania.
The Bank of Albania says legal changes in 2011 requiring Greek banks in Albania to operate as independent subsidiaries in Albania have considerably limited the spillover effects from their parent banks especially in the first half of this year when banks in Greece temporary closed down and imposed limits on cash withdrawals.
Albania’s central bank says the situation of the three subsidiaries of Greek banks has calmed down after panic withdrawals last July.
The three Greek-owned banks operating in Albania lost considerable ground in the first half of this year when the crisis in the neighboring country escalated and parent banks struggled as Greece was having tough negotiations with its creditors over a new bailout deal.
Data published by Albania’s Association of Banks shows Tirana Bank, Alpha Bank and NBG Bank suffered considerable deposit withdrawals in the first half of this year in a psychological effect as the situation in Greece deteriorated in apparent panic withdrawals despite appeals by the country’s central bank that deposits in Greek banks operating in Albania are safe because of operating as independent from their parent banks.
Data shows some savers withdrew some 19 billion lek (Euro 134 million) from the three Greek-owned banks in Albania in the first half of 2015.
