TIRANA, Aug. 19 – 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 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.
Tirana Bank, part of Greece-based Piraeus Bank and the biggest Greek bank operating in Albania, was the only Greek subsidiary to post losses in the first half of 2015 when it also cut staff and closed 8 branches in the country.
The share of Greek bank assets in the Albanian banking system is reported to have dropped to 15.3 percent, down from 16.8 percent at the end of 2014 and 25 percent in the pre-crisis years.
Greek banks accounted for 17.7 percent of total lending in the first half of 2014, down from 18.6 percent at the end of 2014, down from about 40 percent at the end of 2008 when Greek banks in Albania also included the Emporiki Bank, currently operated by France-based Credit Agricole.
Central bank governor Gent Sejko had assured the escalation of the crisis in neighboring Greece has only had a psychological impact on Albania’s banking system with sporadic deposit withdrawals from the three Greek bank subsidiaries.
Data shows Albanian households withdrew around 6 billion lek (€42.2 mln) in deposits from banks and invested around 3.73 billion lek (€26 mln) in investment funds in the first half of this year compared to the end of 2014.
The escalating crisis in neighboring Greece will affect Albania’s growth by at least 0.25 percentage points, Albania’s central bank says in its latest analysis.
While the neighboring country has reached a new €85 bln three-year bailout deal with its creditors, the escalation of the crisis in recent months in Greece is expected to have a real impact on the Albanian economy in the second half of this year as the country’s second top trading partner, main foreign investor, and the host of some 500,000 migrants who have been the key source of remittances.
Experts say the spillover risks from the Greek crisis are relatively low and mainly affect exports and remittances, already on a downward trend since Greece plunged into recession in 2008. Meanwhile, the three Greek bank subsidiaries in Albania are considered safe because of operating as independent from their parent banks.
