Resolution pushes to prevent banks’ transfer of profits

TIRANA, June 4 – With credit having plunged to negative growth rates of around 2 percent and lending standards remaining tight, MPs of the parliamentary economy committee have addressed the central bank through a resolution to prevent investments abroad by the 16 overwhelming foreign-owned commercial banks operating in Albania.
“The central bank policies should target investment of money in Albania because of the increase in banks’ investments abroad. Last year, credit shrank but banks’ profits rose by 40 percent,” said opposition Democratic Party MP Ridvan Bode, a former finance minister.
Anastas Angjeli, a ruling Socialist Party MP also appealed to the central bank to increase its interventions in helping the economy and supervising banks.
Banks’ profits registered a turning point in the final quarter of 2013 driven by a slight drop in non-performing loans and a rise in non-interest income activities, according to the central bank. After posting losses of around 1.3 billion lek (Euro 9 million) in the first three quarters of 2013, banks’ profits unexpectedly recovered to 6.5 billion lek (Euro 46 million) at the end of 2013 as bad loans dropped by 1 percent to 23.2 percent while non-interest income rose by five times.
Bank of Albania data show the 16 commercial banks operating in Albania posted profits of around 6.5 billion lek in 2013, registering the best performance since 2010.
In 2012, banks registered profits of 3.7 billion lek (Euro 26 million) compared to 706 million lek (Euro 5 million) in 2011, 6.7 billion lek (Euro 47 million) in 2010 and 3.5 billion (Euro 24.5 million) in 2009 in the onset of the global crisis when the banking system was affected by panic deposit withdrawals fuelled by concerns about the health of the Greek banking system in late 2008.
Bank of Albania data show total investments abroad by banks operating in Albania rose to 190.7 billion lek (Euro 1.33 billion) at the end of the first quarter of 2014, up from 1.24 billion euros at the end of 2013 and 1.15 billion euros at the end of the first quarter of 2013.