Data made available by the Deposit Insurance Agency show 95 percent of depositors possess less than 2.5 million and around 41 percent of the total deposits
TIRANA, March 19 – The minority 5 percent of Albanians who own more than 2.5 million lek (Euro 17,587, USD 22,743) in bank deposits, the threshold under which deposits are fully insured, increased their share of total deposits by another percentage point in 2012. Data made available by the Deposit Insurance Agency show 95 percent of depositors possess less than 2.5 million and around 41 percent of the total deposits. The remaining 5 percent of depositors having more than 2.5 million lek in their bank accounts possess around 59 percent of the total amount of deposits in the 16 commercial banks operating in Albania, up 1 percent compared to 2011.
The overwhelming majority of Albanian depositors have managed to save up to 2.5 million lek which is the threshold making them fully safe and guaranteed by the
The data reconfirm the deep social gap between the rich and the poor, although the overwhelming majority of Albanians own a house. Average deposits for the rich stand at 55,000 USD while the average savings for the overwhelming majority is at around USD 2,000.
While domestic consumption and investments remain sluggish preventing the country’s economic recovery, Albanians continue depositing considerable amounts in banks uncertain about their futures and fearing a possible escalation of the crisis. Meanwhile, lending has almost frozen after growing by an average of 10 percent in the past three years compared to the pre-crisis levels of 30 to 50 percent. Central bank data show deposits grew by around 56 billion lek (Euro ) to 937.4 billion lek in 2012, registering a 6.36 percent increase, sharply lower compared to 11.7 percent in 2011 and 18.5 percent growth rate in 2010, but better compared to 2008 and 2009 at 2.2 percent and 6 percent respectively.
Lending sharply decelerated to 2.36 percent at the end of 2012, down from 12 percent in 2012. In the global crisis year of 2009 credit growth slowed down to 11 percent and decelerated to 9.6 percent in 2010, according to Bank of Albania data.
Bank of Albania data show Tirana held 38.5 percent of the total deposits of 892 billion lek at the end of the first quarter of 2012. Differently from other districts, the majority 58 percent of deposits in Tirana are in foreign currency mostly euro. Second comes Durres, the country’s second largest city which holds 8.9 percent of total deposits, followed by Vlora with 6.7 percent and Elbasan with 6 percent.
After panicky withdrawing around 10 percent of total deposits (Lek 62.7 bln, Euro 440 mln) in the final quarter of 2008 and in early 2009 in the face of spillovers from instability of global financial markets, Albanians have returned to deposits and cut down on credit seeing less investment opportunities in a saturated market where consumption is declining for consecutive quarters as shown by INSTAT data on retail sales.
As elsewhere in the region, Albanian banks witnessed substantial panic deposit withdrawals in the face of spillovers from instability of global financial markets, which were compounded by concerns about the health of the Greek banking system in the fall of 2008. Ample liquidity buffers were utilized to meet deposit withdrawals. To boost confidence, deposit insurance limits were raised fivefold to 2.5 million lek (25,000 US dollars), and deposits started to recover from the second half of 2009.
