The competition authority in Albania states that it has launched an in-depth investigation into the four main banks in the country to verify whether the high profit rates could be the result of an abuse of a dominant position.
The preliminary results of the survey showed that all four banks apply extremely low deposit rates and high commissions; elements that could be part of a plan to "take out" the competition:
"There are very low interest rates on deposits (on 0,55% on an annual basis), a relatively high difference between deposit rates and interest rates (around 6%) and a trend of rising rates on government bonds, in conditions of easy monetary policy and at a time when the key rate has been on a downward trend. ”- asserted the competition authority in the 2015, during the beginnings of the preliminary investigation.
The four banks
The activities of the four largest banks of the country will be analyzed during the three-year period 2016-2018, starting from the most important in the country in terms of profit, the BKT (Turkish property).
The audit also includes the Albanian branch of the Raiffesen Bank - the largest bank in the country for about a decade until the 2013 - Credins Bank and Banca Intesa Sanpaolo, which last year acquired the small Veneto Banca.
At the end of the third quarter of the 2018, these four banks represented the 67,8% of assets of the Albanian banking system; with the first two - BKT and Raiffesen - which reached almost the total 45% of market shares.
Among these, Raiffesen (owned by Austria) is the only bank to have seen its market share decrease in the last three years, with a loss of 6 percentage points earned by the three main competitors.
The Albanian banking system
Despite a series of acquisitions and mergers in the banking market over the past two years, the Bank of Albania describes the country's banking system as well capitalized and profitable.
However, due to low demand and the free fall of the euro in the country, the credit rate has grown moderately. As a result, banks have had to invest more in government bonds.
According to official data, the banks operating in Albania have registered a record profit of around 175 million euro in the 2017, more than double compared to the 2016 and more than the previous record of 125 million made in the 2015.
On the other hand, numerous small banks have instead accumulated losses in recent years: three EU-owned banks - two Greek and one French - have left Albania in the last two years.
"Banking supervision plays a fundamental role in containing risks deriving from loans with related parties. ”- warned the International Monetary Fund in its last report.
In this context, the director of the central bank - Gent Sejko - specifically asked the banks operating in the country to attenuate the loan standards, so that the current stagnant credit situation receives an impulse:
"The role of banks is essential in this direction. The sector preserves the savings of the Albanians, but must make these savings available for the growth and development of the country. There is no growth without credit and without growth all savings will lose value."- said Sejko.
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