financial stability report - bqk-kos.org · financial stability report number 8 | 11 1....

Financial Stability

Report

Number |08

December |2015

BANKA QENDRORE E REPUBLIKES SË KOSOVËS

CENTRALNA BANKA REPUBLIKE KOSOVA

CENTRAL BANK OF THE REPUBLIC OF KOSOVO

2 |

Efficiency of Banks in South-East Europe: With Special Reference to Kosovo CBK Working Paper no. 4

Number 8 Financial Stability Report

| 1

BANKA QENDRORE E REPUBLIKËS SË KOSOVËS

CENTRALNA BANKA REPUBLIKE KOSOVA

CENTRAL BANK OF THE REPUBLIC OF KOSOVO

Financial Stability Report

Number 8

Financial Stability Report Number 8

2 |


| 3

PUBLISHER © Central Bank of the Republic of Kosovo

Economic Analysis and Financial Stabilty Report

33 Garibaldi, Prishtinë 10 000

Tel: ++381 38 222 055

Fax: ++381 38 243 763

Web-site www.bqk-kos.org

E-mail [email protected]

EDITOR-IN-CHIEF Arben MUSTAFA

EDITOR Albulena XHELILI

AUTHORS Taulant SYLA

Arta NUSHI

Hana GAFURRI

Krenare MALOKU

Zana GJOCAJ

Bejtush KIÇMARI

TRANSLATOR and Butrint BOJAJ

TECHNICAL EDITOR

http://www.bqk-kos.org/

mailto:[email protected]

2 |



| 5

ABBREVIATIONS:

ATM Automated Teller Machines

CAR Capital Adequacy Ratio

CBK Central Bank of the Republic of Kosovo

CEE Central and Eastern Europe

CIS Commonwealth of Independent States

EBRD European Bank for Reconstruction and Development

ECB European Central Bank

FDI Foreign Direct Investments

GDP Gross Domestic Product

HHI Herfindahl-Hirschman Index

IMF International Monetary Fund

KAS Kosovo Agency of Statistics

KPST Kosovo Pension Savings Trust

MF Ministry of Finances

MFI Micro-Finance Institutions

MTA Money Transfer Agencies

NFA Net Foreign Assets

NIM Net Interest Margin

NPISH Non-Profitable Institutions Serving Households

NPL Non-Performing Loans

ODC Other Depository Corporations

OECD Organization for Economic Cooperation and Development

POS Point of Sales

pp Percentage Points

PTK Post and Telecommunication of Kosovo

RLI Rule of Law Index

ROAA Return on Average Assets

ROAE Return on Average Equity

ROE Return on Equity

RWA Risk Weighted Assets

SDR Special Drawing Rights

SEE South-Eastern Europe

TPL Third Party Liabilities

VAT Value-Added Tax

Note: Users of the data are required to cite the source.

Suggested citation: Central Bank of the Republic of Kosovo (2015),

Financial Stability Report No. 8, Prishtina: CBK.

Any required correction will be made in the electronic version.

2 |



| 5

CONTENTS:

1. Governor’s Foreword ------------------------------------------------------------------------------- 10

2. Summary ---------------------------------------------------------------------------------------------- 12

3. External economic and financial environment ------------------------------------------------ 15

4. Kosovo’s Economy ---------------------------------------------------------------------------------- 23

5. Kosovo’s Financial System------------------------------------------------------------------------ 27

5.1. General Characteristics ---------------------------------------------------------------------------------- 27

5.2 The exposure of external sector ------------------------------------------------------------------------ 29

6. Kosovo’s Banking Sector -------------------------------------------------------------------------- 31

6.1 Structure of the Banking Sector ------------------------------------------------------------------------ 31

6.2. Activity of Banking Sector ------------------------------------------------------------------------------- 32

6.3. Banking sector performance ---------------------------------------------------------------------------- 44

6.4 Banking sector risks --------------------------------------------------------------------------------------- 49

6.5. Stress-test Analysis --------------------------------------------------------------------------------------- 63

6.6. Financial infrastructure in Kosovo --------------------------------------------------------------------- 67

7. Pension Sector --------------------------------------------------------------------------------------- 70

7.1 Structure of pension sector ------------------------------------------------------------------------------ 70

7.2. Performance of the Pension Sector ------------------------------------------------------------------- 71

8. Insurance Sector------------------------------------------------------------------------------------- 72

8.1 Structure of Insurance Sector --------------------------------------------------------------------------- 72

8.2. Activity of the Insurance Sector ------------------------------------------------------------------------ 72

8.3. Performance of the Insurance Sector ---------------------------------------------------------------- 74

9. Microfinance Sector and Financial Auxiliaries ------------------------------------------------ 75

9.1. Microfinance Sector --------------------------------------------------------------------------------------- 75

9.2. Performance of the Microfinance Sector ------------------------------------------------------------- 77

9.3 Financial Auxiliaries ---------------------------------------------------------------------------------------- 78

10. Shtojca statistikore -------------------------------------------------------------------------------- 79

11. Referencat ------------------------------------------------------------------------------------------- 97


| 7

LISTA E FIGURAVE ---------------------------------------------------------------------------------------------- 16

Figure 1. EURIBOR interbank lending and ECB refinancing rate -------------------------------------- 16

Figure 2. Brent crude oil price ----------------------------------------------------------------------------------- 17

Figure 3. Structure of ProCredit Holding assets ------------------------------------------------------------ 20

Figure 4. Efficiency indicators of PCH ------------------------------------------------------------------------- 20

Figure 5. Structure of Raiffeisen Bank International ------------------------------------------------------- 21

Figure 6. Growth trend of loans and deposits of RBI ------------------------------------------------------ 21

Figure 7. Efficiency indicators of RBI -------------------------------------------------------------------------- 22

Figure 8. Structure of NLB Group assets --------------------------------------------------------------------- 23

Figure 9. Growth trend of loans and deposits of NLB Group -------------------------------------------- 23

Figure 10. Efficiency indicators of NLB Group --------------------------------------------------------------- 23

Figure 11. Real GDP growth rate, in percent ---------------------------------------------------------------- 25

Figure 12. Inflation and its main contributors, annual growth in percent ------------------------------ 26

Figure 13. Imports, exports and trade balance -------------------------------------------------------------- 26

Figure 14. Financial system assets and its constituent sectors ----------------------------------------- 28

Figure 15. Structure of assets of the financial system --------------------------------------------------- 28

Figure 16. Financial intermediation rate by sectors in Kosovo ------------------------------------------ 29

Figure 17. Financial intermediation rate of the banking sector in the region ------------------------- 29

Figure 18. Structure of foreign claims ------------------------------------------------------------------------- 30

Figure 19. Structure of foreign liabilities ---------------------------------------------------------------------- 30

Figure 20. Foreign exposure by financial sectors ----------------------------------------------------------- 31

Figure 21. Structure of commercial banks, by ownership ------------------------------------------------ 32

Figure 22. Concentration level in the banking sector ------------------------------------------------------ 32

Figure 23. Structure of the banking sector assets ---------------------------------------------------------- 33

Figure 24. Assets of the banking sector ---------------------------------------------------------------------- 34

Figure 25. Structure of securities ------------------------------------------------------------------------------- 34

Figure 26. Contribution to loans growth by sectors -------------------------------------------------------- 35

Figure 27. Total loans and new loans ------------------------------------------------------------------------- 35

Figure 28. New loans ---------------------------------------------------------------------------------------------- 35

Figure 29. New loans by sectors -------------------------------------------------------------------------------- 36

Figure 30. New loans by sectors and purpose of use ----------------------------------------------------- 36

Figure 31 Total loans, new loans, paid loans and outstanding loans ---------------------------------- 36

Figure 32. Structure of loans by economic activity --------------------------------------------------------- 38

Figure 33. Loans to industrial sector --------------------------------------------------------------------------- 38

Figure 34. Loans by economic activity ------------------------------------------------------------------------ 39

Figure 35. Structure of loans by maturity --------------------------------------------------------------------- 40

Figure 36. Growth trend of loans by maturity ---------------------------------------------------------------- 40

Figure 37. Deposits of the banking sector -------------------------------------------------------------------- 41

Figure 38. Enterprise deposits ---------------------------------------------------------------------------------- 41

Figure 39. Non-resident deposits ------------------------------------------------------------------------------- 42


8 |

Figure 40. Structure of deposits by maturity ----------------------------------------------------------------- 42

Figure 41. Time deposits ----------------------------------------------------------------------------------------- 43

Figure 42. Average interest rates ------------------------------------------------------------------------------- 43

Figure 43. Average interest rates on loans to enterprises and to households ----------------------- 44

Figure 44. Average interest rates on loans to enterprises ------------------------------------------------ 44

Figure 45. Average interest rates on loans to enterprises, by economic activity-------------------- 44

Figure 46. Average interest rates on loans to households, by purpose of use ---------------------- 45

Figure 47. Average interest rates on enterprise and household deposits ---------------------------- 45

Figure 48. Financial performance of the banking sector -------------------------------------------------- 45

Figure 49. Banking sector income ------------------------------------------------------------------------------ 46

Figure 50. Banking sector interest income ------------------------------------------------------------------- 46

Figure 51. Banking sector income, annual change --------------------------------------------------------- 46

Figure 52. Banking sector expenditures ---------------------------------------------------------------------- 47

Figure 53. Banking sector expenditures, annual change ------------------------------------------------- 47

Figure 54. Interest and non-interest expenditures by categories --------------------------------------- 48

Figure 55. NPL and loan loss provisions --------------------------------------------------------------------- 48

Figure 56. Profitability indicators of the banking sector --------------------------------------------------- 48

Figure 57. Expenditures to income ratio of the banking sector ------------------------------------------ 49

Figure 58. The map of the banking sector risks ------------------------------------------------------------- 50

Figure 59. Loans and deposits of the banking sector ------------------------------------------------------ 51

Figure 60. Broad liquid assets ratio to short term liabilities ---------------------------------------------- 51

Figure 61. Banking sector reserves ---------------------------------------------------------------------------- 51

Figure 62. Liquidity gap ------------------------------------------------------------------------------------------- 52

Figure 63. NPL to total loans ratio ------------------------------------------------------------------------------ 53

Figure 64. Annual growth of total loans and NPL ----------------------------------------------------------- 53

Figure 65. NPL by economic sectors -------------------------------------------------------------------------- 54

Figure 66. Structure of loans by classification --------------------------------------------------------------- 54

Figure 67. Loans movements by credit classification ------------------------------------------------------ 54

Figure 68. NPL and provisions ---------------------------------------------------------------------------------- 55

Figure 69. Concentration of credit risk ------------------------------------------------------------------------ 55

Figure 70. Banking sector capitalization ---------------------------------------------------------------------- 56

Figure 71. Regulatory capital and RWA ---------------------------------------------------------------------- 56

Figure 72. Structure of regulatory capital --------------------------------------------------------------------- 57

Figure 73. Structure of Tier 1 capital --------------------------------------------------------------------------- 57

Figure 74. Structure of Tier 2 capital --------------------------------------------------------------------------- 58

Figure 75. Structure of RWA by risk weight ------------------------------------------------------------------ 58

Figure 76. RWA to total sector assets ratio ------------------------------------------------------------------ 58

Figure 77. Opened positions in foreign currencies against Tier 1 capital ----------------------------- 59

Figure 78. Loans and deposits in foreign currency --------------------------------------------------------- 60

Figure 79. Loans and deposits sensitivity to interest rates ----------------------------------------------- 60


| 9

Figure 80. The gap of assets and liabilities sensitivity to interest rate --------------------------------- 61

Figure 81. Structure of pension sector investments -------------------------------------------------------- 71

Figure 82. Assets of KPSF --------------------------------------------------------------------------------------- 73

Figure 83. Assets of SKPF --------------------------------------------------------------------------------------- 73

Figure 84. Structure of insurance companies assets, by ownership ----------------------------------- 73

Figure 85. Structure of insurance sector assets ------------------------------------------------------------ 74

Figure 86. Liabilities and equity of insurance companies ------------------------------------------------- 74

Figure 87. Premiums received and claims paid ------------------------------------------------------------- 74

Figure 88. Assets of microfinance institutions --------------------------------------------------------------- 76

Figure 89. Structure of MFI sector loans ---------------------------------------------------------------------- 76

Figure 90. Structure of MFI sector loans, by economic activity ----------------------------------------- 76

Figure 91. Structure of MFI sector loans, by maturity ----------------------------------------------------- 77

Figure 92. Average interest rate on loans -------------------------------------------------------------------- 77

Figure 93. Average interest rate on loans -------------------------------------------------------------------- 77

Figure 94. Structure of leasing ---------------------------------------------------------------------------------- 78


10 |

LIST OF TABLES -------------------------------------------------------------------------------------------------- 29

Table 1. Number of financial institutions --------------------------------------------------------------------- 29

Table 2. Structure of assets in the banking sector --------------------------------------------------------- 33

Table 3. Structure of the banking sector liabilities ---------------------------------------------------------- 41

Table 4. Key efficiency indicators of the banking sector -------------------------------------------------- 49

Table 5. Indicators of the banking sector capacity --------------------------------------------------------- 49

Table 6. The Indicators used to identify systemic importance of the banks in Kosovo ------------ 61

Table 7. Results of systemic importance of the Kosovo banks------------------------------------------ 63

Table 8. Summary of stress-test results: credit risk -------------------------------------------------------- 66

Table 9. Summary of stress-test results: liquidity risk ----------------------------------------------------- 68

Table 10. The share of payment instruments to total EICS transactions ----------------------------- 69

Table 11. Banking Sector Network ----------------------------------------------------------------------------- 70

Table 12. The share of the value of card transactions by terminals in the total value of card

transactions ---------------------------------------------------------------------------------------------------------- 70

Table 13. Pension Funds Structure by Ownership --------------------------------------------------------- 71

Table 14. Received gross premiums -------------------------------------------------------------------------- 75

Table 15. Claims paid --------------------------------------------------------------------------------------------- 75

Table 16. Additional efficiency indicators of the sector ---------------------------------------------------- 79

LIST OF BOXES --------------------------------------------------------------------------------------------------- 20

Box 1. Performance of the main banking groups operating in Kosovo -------------------------------- 20

Box 2. New loans --------------------------------------------------------------------------------------------------- 35

Box 3. Bank lending survey -------------------------------------------------------------------------------------- 37

Box 4. Identification of banks with systemic importance in Kosovo ------------------------------------ 61

2 |



| 11

1. Governor’s Foreword

Kosovo’s economy in 2015 was characterized by accelerated growth pace, generated mainly by

increased domestic demand. Price developments in the global markets continue to have a

significant impact on the price level in Kosovo, making the country's economy face with

deflationary developments. The fiscal sector continues to remain sustainable, with low budget

deficit and public debt. Trade exchanges with the external sector, including import and export,

continued to grow. Considerable growth was also recorded in remittances and foreign direct

investments received in Kosovo, which represent important sources of financing for the overall

economic activity in the country.

The banking sector has expanded its activity and has marked a further improvement of the

financial soundness indicators, thus continuing to be a very important contributor to the

development and stability of the economy. The easing of credit standards by banks and, on the

other hand, the increased demand for loans from households and enterprises have resulted in the

acceleration of bank lending growth, which has encouraged the growth of domestic demand. The

decrease of loans interest rates has given a significant contribution to the increased demand for

loans, which are already close to the level of interest rates applied in the region countries. The

accelerated credit growth, along with the reduction of interest rates and the improvement of

other lending conditions represent very important developments in easing the access to finance

in Kosovo. This ease is also reflected in the growth of lending to less credited sectors of the

economy, such as agriculture, manufacturing and energy, which during the first half of 2015

were the sectors with the highest growth rates of loans received.

In addition to accelerated growth in lending, the first half of 2015 was characterized by further

improvement of the loans portfolio quality as a result of lowering the value of non-performing

loans in the banking sector. The banking sector also continues to have a high level of

capitalization and satisfactory liquidity position. The high level of the banking sector

sustainability is also shown by the results of the stress-test where all the banks appear to be able

to withstand shocks considered as hypothetical scenarios.

As regards the other sectors of the financial system, the pension sector continued to mark a good

financial performance, increasing the share price in invested assets and a positive return on

investments. The insurance sector recorded assets growth, but continues to face with difficulties

in terms of profitability. MFI sector continued with lending expansion, thus increasing access to

finance especially for individuals and small enterprises. However, the funding of microfinance

institutions continues to be characterized by high costs, which sets out the need to further

increase the efficiency of this sector.

Based on the current state of the financial system and taking into account the forecasts for the

overall macroeconomic developments in the country, it is estimated that the country's financial

system will continue to expand its activity and to maintain sustainability during the following

period. The Central Bank of the Republic of Kosovo will continue to monitor and evaluate closely

the developments related to the financial stability in the country and at the same time informing

the public regularly on developments in the financial sector and the economy in general remains

an important priority.

Bedri HAMZA

Governor


12 |


| 13

2. Summary

External economic environment, during the first half of 2015, was characterized by accelerated

growth pace of economic activity. The improved economic activity is translated into improvement

of the credit cycle in the euro area, where until June 2015 lending activity recovered from the

previous year’s decline. The continuous price decline in the international markets was also

reflected in the euro area which, in June 2015, was characterized by low inflation rate of 0.2

percent. In the euro area it is expected a further strengthening of the economic activity, relied

mainly on a further decline in oil prices, rising consumer confidence and positive developments in

labor markets. Also, the continuous increase of the euro area exports as a result of depreciation of

the euro and the program of quantitative easing from the European Central Bank (ECB) is

expected to have a positive impact on the economic activity. The performance of the economic

activity in the Western Balkans, in the first half of 2015, is estimated to have marked

improvement. Similar to the euro area, deflationary pressures were present also in the region in

2015. Western Balkans during 2015 also increased financial intermediation, where all the

countries were characterized by an acceleration of credit growth. Banking sectors of the region

improved the level of capitalization and the quality of the loan portfolio during 2015. The IMF

and World Bank forecast an acceleration of economic growth in the Western Balkans region in

2015.

Kosovo’s economy was characterized by overall macroeconomic stability, manifested by positive

economic growth rate, as well as of the fiscal and price sustainability during the first half of

2015. According to KAS estimates, the first quarter was characterized by an annual growth of 0.2

percent, while in the second quarter the country’s economy marked an accelerated growth rate by

recording an annual growth of 3.4 percent. The economic growth in the first six months of 2015 is

estimated to be generated mainly by increased domestic demand, namely by the increase in

consumption and investments, while net exports continued to contribute negatively to the

economic growth. In the first six months of 2015, Kosovo’s economy was characterized by a price

decline, where the inflation rate was -0.4 percent. Kosovo continues to have a stable fiscal

position. CBK estimates suggest an acceleration of economic growth for the entire year of 2015

compared with the previous year. The growth rate of the real GDP for 2015 is estimated to be 3.5

percent, compared with the growth of 1.2 percent in 2014. The acceleration of the growth rate is

relied on expectations for the growth of consumption and investments, where an important

contribution was given by the accelerated growth of the bank lending.

Kosovo’s financial system, during the first half of 2015, was characterized by an activity

expansion and a high level of sustainability in all its constituent sectors. The banking sector

recorded an acceleration of lending thus reinforcing its role in financing the economic activity.

The value of total loans until June 2015 amounted to euro 2.01 billion, representing an annual

increase of 6.1 percent. Lending growth occurred as a result of the easing of credit supply, while

also the demand for loans increased. The structure of lending to companies remains similar to

previous years, where loans intended for the trade sector represent the largest category with a

share of 54.0 percent of total loans to enterprises. Agriculture, energy and manufacturing,

despite of being the sectors with the lowest access to bank financing, marked the highest annual

growth of loans. Increased lending in the country has been funded mainly by the increase in

deposits collected within the country. Deposits in the banking sector recorded a growth of 6.3

percent, reaching a value of euro 2.57 billion in June 2015. The structure of deposits by maturity

has undergone significant changes in the past two years. While time deposits dominated the

structure of deposits in the past, in June 2015, the main category of deposits was represented by

transferable deposits. This development in the structure of deposits was mainly due to the sharp


14 |

decline in the interest rates on deposits in the past two years, which may have discouraged

scheduling of deposits by depositors.

The banking sector during the first half of 2015 was characterized by a significant reduction in

the interest rate on loans, and a slight increase in the interest rate on deposits. The average

interest rate on loans decreased to 7.6 percent, in June 2015, from 10.5 percent as it was in June

2014. Meanwhile, the average interest rate on deposits in June 2015 increased to 0.8 percent

from 0.6 percent in June 2014. Consequently, the interest rate spread on loans and deposits in

June 2015 decreased to 6.8 percentage points from 9.9 percentage points in June 2014.

Financial soundness indicators of the banking sector continue to reflect a high degree of

sustainability. The banking sector recorded a significant improvement of the financial

performance marking a net profit with an amount of euro 44.9 million in June 2015, mainly as a

result of the reduction of expenses, particularly for provisions and interest expenses on deposits.

The liquidity position of the banking system remains at a satisfactory level, where in June 2015,

the broad liquid assets to short-term liabilities ratio stood at 41.9 percent, which is significantly

above the minimum of 25 percent as required by the Central Bank. The capital level of the

banking sector strengthened mainly due to the significant improvement of the financial

performance, resulting in an increase of capital quality as well as the sector’s capitalization

indicators. In June 2015, the Capital Adequacy Ratio (CAR) reached 19.0 percent compared to

17.4 percent as it was in the previous year. The banking sector’s exposure to credit risk has

shown a downward trend, where the share of non-performing loans to total loans in June 2015

declined to 7.2 percent from 8.2 percent in June 2014. The banking sector has also increased the

coverage degree of non-performing loans with loan loss provisions to 119.3 percent from 116.4

percent in June 2014. The banking sector’s exposure to market risk remains at a low level given

the significant decline of the net aggregated open position in the foreign currency to Tier 1

capital, low share of loans in non-euro currency to total loans portfolio, as well as the low

sensitivity of assets and liabilities to interest rate movements considering that the majority of

loans and deposits have fixed interest rates. Moreover, the stress test analysis continue to

suggest high capacity of the banking sector to cope with considered shocks in the context of

hypothetical scenarios.

Banking infrastructure, during 2015, continued to expand. The increase of the number of ATMs

and POS devices resulted in an increased number and value of withdrawals through ATMs, and

sales through POSs. During this period, it has increased the number and the value of

transactions through the Electronic Interbank Clearing System in Kosovo (EICS). Also, it was

marked an increase in the total number of bank accounts, e-banking, and the number of debit

and credit cards. All these developments led to increased efficiency of the banking services.

With increased activity were characterized also other constituent sectors of the financial system:

the pension sector, the insurance sector and the sector of microfinance institutions. Pension

sector continues to be the sector with the highest growth rate of asset within the Kosovo’s

financial system, where the assets value of the sector until June 2015 amounted to euro 1.18

billion, marking an annual growth of 18.1 percent. Also pension sector continued to record good

financial performance, thus increasing the share price of assets invested and, consequently, a

positive return on investments. The insurance sector has increased its activity where in June

2015 the value of assets of the sector amounted to euro 151.2 million, which corresponds to an

annual growth of 11.5 percent. However, the sector’s financial performance continues to be not

favorable, hence deepening the loss compared to the previous year. The microfinance sector in

2015 was characterized by expansion of its activity reaching a total assets value of euro 116.3

million, corresponding to an annual growth of 2.8 percent. The microfinance sector until June


| 15

2015 marked a significant increase of the profit that was reflected in the improvement of the

profitability indicators.


16 |

3. External economic and financial environment

Macroeconomic environment in the euro area

External economic environment during the second quarter of 2015 was characterized by

accelerated growth pace of the economic activity. The euro area economy, compared to the same

period of the previous year, marked an increase of 1.2 percent (0.8 percent in Q2 2014), whereas

compared to the previous quarter recorded a real economic growth rate of 0.3 percent (0.1 percent

in Q2 2014). The increased economic activity, mainly supported by manufacturing and services

sector, remained concentrated in Germany, Spain, Italy and Greece, while France was

characterized by slower economic growth rate. Despite expectations for an economic decline of 0.5

percent, as a result of failing to pay the debt in due time, Greece recorded an annual growth rate

of 1.4 percent in the second quarter, while compared to the previous quarter, the real economic

growth rate was 0.8 percent. Economic activity in Greece is estimated to have been supported by

consumer spending growth during the second quarter of 2015, driven by expectations for

increased control of the capital, as well as the increased revenues from tourism.

According to the ECB, the euro area was

characterized by an inflation rate of 0.2

percent in June 2015, exceeding the

year-end deflationary period of 2014.

The inflation rate in the euro area is

expected to remain very low in the

upcoming months, while until the end of

2015 it is expected a gradual increase in

inflation. For 2015 as a whole, the IMF

has forecasted an inflation rate of 0.1

percent. The gradual increase in the

inflation rate is expected to be mainly

driven by the impact of monetary easing

policies in the overall demand in the

euro area, the impact of the lower euro exchange rate, as well as expectations for a gradual

increase in oil prices.

After launching the quantitative easing program by the ECB, senior officials of ECB stated that

the easing monetary policies will be supplemented by macro-prudential policy in order to ensure

the maintenance of the financial stability. The ECB continued to keep the refinancing rate

unchanged also in June 2015. However, the launch of the broad incentive program as of March of

this year has resulted in the decline of the interest rates for 1 month and 12-month Euribor

interbank lending. In June 2015, 1 month Euribor rates marked a decline of an average of -0.06

percent from -0.01 percent as they were in March 2015. On the other hand, 12-month average

rates marked an average decrease of 0.16 percent in June 2015, from the average of 0.21 percent

in March 2014 (figure 1).

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Mar

Jun

e

Se

p

Dec

Mar

Jun

e

Se

p

Dec

Mar

Jun

e

Se

p

Dec

Mar

Jun

e

Se

p

Dec

Mar

Jun

e

Se

p

Dec

Mar

Jun

e

Se

p

Dec

Mar

Jun

e

2009 2010 2011 2012 2013 2014 2015

1m 12m Norma e rif inancimit e ECB-së, (boshti i djathtë)

Figure 1. EURIBOR interbank lending and ECB refinancing rate

Source: Euribor (2015) and ECB (2015)


| 17

International oil price

The price of Brent Crude1 oil in the second quarter of 2015 marked a decline of around 43.4

percent compared to the same period of the previous year. The sharpest oil price decline was

marked in January 2015, while expectations for 2015 show for an average of oil price decline

from 17 percent compared to 2014 (figure 2).

With a price declines in the second

quarter were also characterized the gold

metals (figure 2). The gold price was on

an average of 7.4 percent lower

compared with the second quarter of

2014. The largest decline in the gold

price was recorded in March 2015,

where 1 gold unit (the equivalent

measurement unit is 31.1 grams of gold

and is named "troy oz ") had a lower cost

for about 11.8 percent than in March

2014.

The declining trend of food prices

continued in the second quarter of 2015. Compared to the same period of the previous year, the

food prices index marked an average decline of 20.4 percent, while the cereal price index marked

an average decline of 19.8 percent (figure 12).

Exchange rate of the euro against the major currencies during the second quarter of 2015 was

depreciated against the same period of 2014. The largest depreciation of euro was marked

against the US dollar with 19.9 percent, followed by Swiss franc with 14.9 percent and British

pound with 12.0 percent. While against Macedonian denar euro has remained almost unchanged

in the second quarter compared to the same period of 2014, while against the Serbian dinar and

the Albanian lek has marked an appreciation of 4.1 and 0.3 percent, respectively. Euro marked a

depreciation also against the Croatian kuna with 0.2 percent, in the second quarter of 2015.

Euro area banking sector

The banking sector in major euro area countries, except Greece, was characterized by an

improvement of the key financial soundness indicators. Capitalization level of the banking sector,

expressed through the regulatory capital to risk weighted assets ratio, improved to 18.1 percent

in Germany (17.1 percent in June 2014) and to 14.4 percent in Spain (13.5 percent in June 2014).

However, countries such as Greece and Italy were characterized by deterioration of the

capitalization level of the sector where in June 2015 the level of capitalization in Greece was 10.3

percent (16.2 percent in June 2014) while in Italy it was 14.5 percent (15.0 percent in June 2014).

The main countries of the euro area also were characterized by improvement of the liquidity level

in the banking sector, where in June 2015 Germany recorded a liquidity level of 45.4 percent

(45.2 percent in June 2014), while in Italy this indicator was 16.8 percent (16.4 percent in June

2014). On the other hand, Greece was characterized by a decline of liquidity to 28.9 percent from

29.5 percent in June 2014. Regarding the quality of the loan portfolio, countries like Italy and

Greece increased the level of non-performing loans (NPL). In June 2015, the level of NPL reached

18.0 percent in Italy (17.3 percent in June 2014), and 34.7 percent in Greece (34.2 percent in

June 2014). On the other hand, Spain was characterized by a decline of NPL which dropped to

1 Brent Crude’ represents commercial classification for the oil produced in the North Sea as the representative of oil price in global level.

0

20

40

60

80

100

120

140

20

09

M0

1

20

09

M0

4

20

09

M0

7

20

09

M1

0

20

10

M0

1

20

10

M0

4

20

10

M0

7

20

10

M1

0

20

11

M0

1

20

11

M0

4

20

11

M0

7

20

11

M1

0

20

12

M0

1

20

12

M0

4

20

12

M0

7

20

12

M1

0

20

13

M0

1

20

13

M0

4

20

13

M0

7

20

13

M1

0

20

14

M0

1

20

14

M0

4

20

14

M0

7

20

14

M1

0

20

15

M0

1

20

15

M0

4

Figure 2. Brent crude oil price, in USD

Source: World Bank (2015)


18 |

7.0 percent from 9.0 percent in June 2014. The other performance indicators, such as Return on

Assets (ROA) and ROE (Return on Equity), also marked improvement in most euro area

countries, with the exception of Greece where it was observed a deterioration of ROA to -3.3

percent (-0.4 percent in June 2014) and of ROE at -39.1 percent (-4.7 percent in June 2014).

The euro area was characterized by an increased lending activity during the last year, where

according to the ECB, in June 2015, total loans recorded a growth of 1.2 percent, which

represents a significant improvement from the decline of 3.6 percent in June 2014. Within the

euro area, Slovenia recorded the sharpest annual decline in lending with 12.1 percent, while the

Netherlands was characterized by the highest growth of 12.1 percent. With positive

developments were also characterized deposits, which in June 2015 recorded an annual growth of

1.5 percent, which represents a significant improvement compared with the decline of 2.0 percent

in June 2014. Within the euro area, the Netherlands recorded the highest annual growth of

deposits with 12.1 percent, while Slovenia recorded the sharpest annual decline of 6.3 percent.

Consequently, the average of loan to deposit ratio was 100.7 percent in the euro area in June

2015. The highest level of this indicator of 143.2 percent was registered in Cyprus, while the

lowest level of 60.2 percent was recorded in Malta.

Regarding the interest rates, the euro area was characterized by a declining average interest rate

on loans to 2.8 percent in June 2015 from 3.3 percent in June 2014. The lowest average interest

of 1.7 percent was registered in Finland in June 2015 and the highest of 5.5 percent was

registered in Cyprus. The main euro area countries marked an average decline of interest rate on

deposits of 0.4 percentage points and, consequently, the average deposit rate declined to 1.1

percent in June 2015. Belgium was the country with the highest average rate of interest on

deposits with 1.9 percent, in June 2015. While Lithuania was characterized by the lowest

average interest rate on deposits with 0.4 percent, in June 2015. Meanwhile, Greece was the

country which recorded a more significant decline of 0.9 percentage points on the average

interest rate on deposits. The interest rate spread on loans and deposits, in the euro area,

declined to 1.7 percentage points in June 2015 from 1.8 percentage points in June 2014. The

highest interest rate spread on loans and deposits with 3.2 percentage points was registered in

Cyprus, while the lowest of 0.6 percentage points was recorded in Belgium.

Macroeconomic environment in the Western Balkans

The performance of the economic activity in the Western Balkans, in the first half of 2015, is

estimated to have marked improvement. The increased economic activity in 2015 is expected to

be supported mainly by strengthening the external demand, which is expected to be reflected in

increased exports of the Western Balkan countries. According to the IMF forecasts, the Western

Balkan countries are expected to mark an average increase in GDP of 2.8 percent in 2015.

Montenegro is expected to be characterized by the highest economic growth rate of 4.7 percent,

while Serbia is expected to be the only country to record an economic decline of 0.5 percent.

Western Balkan countries in the first months of 2015 were characterized by low inflationary

pressures, driven mainly by food and energy prices on the global level. However, the IMF

forecasts an average inflation rate of 0.9 percent in the countries of the region, in 2015. Albania

is expected to be characterized by the highest inflation rate of 2.2 percent, followed by

Montenegro with 1.7 percent, while Macedonia and Kosovo are expected to be the countries with

the lowest inflation rate of 0.1 percent and -0.5 percent, respectively.


| 19

Banking sector in the Western Balkans

The banking sector in the Western Balkan countries was characterized by positive performance,

which was reflected in the improvement of the key financial soundness indicators. Western

Balkan countries continue to be characterized by a satisfactory level of capitalization of the

banking sector. Over the last year, most of the countries in the region, strengthened

capitalization level, where the average regulatory capital to risk weighted assets until June 2015

was 18.4 percent (17.9 percent in June 2014). Albania was the country which was characterized

by the most significant decline of the capitalization level, which in June dropped to 15.9 percent

from 17.5 percent in June 2014, mainly as a result of higher growth rate of the risk weighted

assets against the movements of the regulatory capital. The level of the banking sector liquidity

in most Wester Balkan countries marked a slight decrease compared with the previous year, thus

reducing the regional average to 47.2 percent in June 2015 (48.9 percent in June 2014). Western

Balkans marked improvement in the quality of the loan portfolio, where the level of non-

performing loans amounted to 14.9 percent in June 2015 compared with the level of 16.0 percent

in June 2014. In June 2015, Kosovo recorded the lowest NPL level with 7.2 percent, while the

highest level of NPL with 22.8 percent was marked in Serbia. Also the profitability indicators

marked improvements compared to the previous period, where ROA of the region improved to 1.2

percent, in June 2015 (0.7 percent in June 2014), while ROE improved to 10.4 percent in June

2015 (7.1 percent in June 2014).

Credit activity in all the Western Balkan countries has increased compared with the first half of

the previous year. The average growth rate of total loans in the region was 4.3 percent. The

largest growth of lending activity of 8.5 percent was recorded in Macedonia, while the smallest

increase of 0.2 percent was marked in Montenegro. Also, deposits marked an increase in all

Western Balkan countries compared to the previous year. The average growth rate of total

deposits in the region was 7.3 percent. The largest increase of 12.0 percent was recorded in

Montenegro, while the lowest of 4.4 percent was recorded in Albania. Consequently, the average

loan to deposit ratio in the region was 97.2 percent, where the highest ratio of 127.3 percent was

registered in Serbia, whereas the lowest level of 55.4 percent was marked in Albania.

Regarding the interest rates on loans in the Western Balkans in general it was marked a

decrease compared to the previous year. Until June 2015, the average interest rate on loans in

the region recorded a decline of 0.52 percentage points reaching 8.64 percent (9.15 percent in

June 2014). Bosnia and Herzegovina, except that remains characterized by the lowest interest

rates on loans with 5.6 percent, also recorded the most significant decline in annual average

interest rate on loans with 0.94 percentage points. Serbia remains the country with the highest

average interest rates on loans, which until June reached 13.5 percent. Moreover, Serbia was the

only country in the region which was characterized by an increased average interest rate of 1.33

percentage points compared to the same period of the previous year. Western Balkans decreased

the average interest rate on deposits as well, by an average of 0.61 percentage points on average

and, as a result, the average interest rate on deposits amounted to 2.24 percent in June 2015.

Kosovo was the country that recorded the lowest interest rate on deposits from 0.81 percent in

June 2015. On the other hand Serbia, despite the fact that it was the country which was

characterized by the most significant annual decline of 1.74 percentage points, continued to be

the country with the highest interest rate on deposits with 5.0 percent in June 2015. Despite the

decline in interest rates on deposits, the most significant decline in interest rates on loans caused

the interest rate spread on loans and deposits, in the Western Balkans to stand at 6.4 percentage

points in June 2015 (6.3 points percent in June 2014). The highest interest rate spread on loans

and deposits of 8.5 percentage points was registered in Serbia, while the lowest of 3.5 percentage

points was marked in Bosnia and Herzegovina.


20 |

Box 1. Performance of the banking groups operating in Kosovo

ProCredit Holding – PCH (Germany)

The value of total assets of the banking group

ProCredit Holding (PCH) reached euro 6.1

billion in June 2015, marking an annual

increase of 5.6 percent. According to the regional

expansion, the structure of assets of the group is

focused on Southeastern Europe, which

comprises 48.7 percent of total assets of the

group. The second important segment is

Germany with 21.2 percent of total assets of the

group, followed by South America and Eastern

Europe with a share of 17.2 percent and 12.9

percent, respectively. PCH in 2014 sold their

segments in the region of Africa and is planning

to sell the segments in South America (figure 3).

During the first half of 2015, the countries of

Southeastern Europe and Germany were characterized by economic growth with a positive impact on the

performance of the group, despite the recession of countries in Eastern Europe and the economic slowdown

in South America due to the depreciation of the currency peso against US dollar and the price decline of

goods in Colombia.

The PCH group’s business model continues to be traditional, where lending is funded mainly by resident

deposits. Over the last year, the group's lending activity was recovered, where in June 2015 the group's total

loans amounted to euro 4.5 billion, representing an annual increase of 6.3 percent compared with the

decline of 0.4 percent in June of the previous year. The recovery coincides with the progress of deposits

which during this period was characterized by an accelerated growth, where until June 2015 amounted to

euro 4.1 billion, representing an annual increase of 9.8 percent (1.3 percent in June 2014). Consequently,

loans to deposits ratio in June 2015 decreased to 110.5 percent from 114.3 percent as it was in June 2014.

PCH group during the first half of 2015 marked an improvement of the overall efficiency indicator,

expressed through the expenditures to income ratio, which in June 2015 was 70.2 percent, representing a

decrease of 3.6 percentage points compared with the

previous year (figure 4). The improvement is mainly

attributed to the faster decline of 7.6 percent of the

operational expenditures and the slight increase of

0.4 percent of operational income. Faster decline of

operational expenditures was a result of reduced

personnel expenditures, which marked a decline of

13.0 percent, and reducing the administrative

expenditures which marked a decline of 2.3 percent.

Within revenues, interest income marked a decline

of 7.5 percent despite the fact that the group's

lending activity increased during this period.

Whereas, income from fees and commissions

recorded a growth of 3.6 percent until June 2015.

Despite the decline in revenues, better management

of expenditures ensured that the group's profit until June 2015 to be significantly higher compared to the

same period of the previous year. Until June 2015, the realized profit amounted to euro 33.1 million (euro

22.9 million until June 2014). Increased profit significantly contributed to improving the rate of return on

equity (ROE) (annualized), which reached 11.6 percent compared with 9.4 percent as it was in 2014. The

capital adequacy ratio (CAR) marked a value of 11.7 percent in June 2015 (12.4 percent in June 2014), while

continuing to meet the regulatory requirements of the capital adequacy (figure 4).

The performance of the group is expected to continue to improve also during the second half of 2015,

influenced among others also by macroeconomic developments in the countries where it operates. This is

48.7%

12.9%

17.2%

21.2%

Southeastern Europe Eastern Europe Southern America Germany

Figure 3. Structure of ProCredit Holding assets, in percent

0%

2%

4%

6%

8%

10%

12%

14%

16%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015

Expenditures to income ratio *ROE CAR

Figure 4. Effeciency indicators of PCH , in percent

*ROE - 2015 is annualized

Source: ProCredit Holding (2015)


| 21

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

June 2011 June 2012 June 2013 June 2014 June 2015

Loans (annual change) Deposits (annual change)

Figure 6. Growth trend of loans and deposits of RBI,in percent

Source: Raiffeisen Bank International (2015)

because initially Germany, the country of origin of PCH, it is expected that until the end of 2015 to have an

economic accelerated growth supported by the price decline of oil, the strong labor market and the growth of

the public expenditures on accommodation of the refugees flow with which all the Europe is facing this year.

Similarly, Southeastern European economies in 2015 are expected to have higher economic growth

compared to the previous year. The performance of the group significantly depends on the performance in

Serbia, Kosovo and Bulgaria where operate three largest group subsidiaries. Although Bulgaria is

forecasted to mark a slowdown growth during 2015, its negative effect may be neutralized by Serbia, which

is expected to mark an economic recovery from the decline of the previous year that came as a result of

floods which harmed the agricultural sector. Given that ProCredit share of assets in Kosovo to total assets

of the group, in June 2015 was 12.8 percent, the performance of the group can be positively influenced by

the Kosovo’s economy, which is expected to mark an accelerated growth as a result of the increased domestic

demand for consumption, and the increased private and public investments.

Raiffeisen Bank International – RBI (Austria)

The value of total assets of the banking group

Raiffeisen Bank International (RBI) amounted to

euro 119.7 billion in June 2015, marking an

annual decline of 5.9 percent. According to the

regional expansion, Austria holds the leading

position in the structure of assets representing

29.9 percent of total assets of the group, followed

by the Central Europe as another important

segment representing about 20.9 percent of total

assets of the group. Southeastern Europe with

17.8 percent represents the third place, followed

by Eastern Europe with a representation of 14.6

percent of total assets of the group. The

remainder includes the units assets in Asia and

America which are planned to be reduced or sold

by the end of 2017 (figure 5). Countries in which

the group operates during the first half of 2015 was characterized by an economic recovery (countries in the

Central Europe) and a moderated economic

growth (Southeastern Europe), while Eastern

European countries in which the group operates,

faced with recession, thus negatively affecting the

performance of the group. The reduction of RBI

assets was mainly driven by the economic

slowdown growth in Austria, from imposing of the

economic sanctions against Russia, which

deepened the recession in this country, from the

depreciation of the currencies of Ukraine and

Russia against the US dollar and euro, and the

changes in the banking legislation in Hungary

(Settlement Act).

The business model of the RBI banking group

continues to be traditional with the lending

activity mainly funded by deposits (figure 6). Over the last year, the group’s lending activity was

characterized by an annual decline of 5.6 percent, where the total loans of RBI, until June 2015, amounted

to euro 76.3 billion. This decline was mainly driven by the decrease of loans in Russia and in Ukraine, and

the decrease of loans in foreign currency in Hungary as a result of changes in banking legislation.

The value of deposits until June 2015 amounted to euro 67.0 billion, marking an annual growth of 4.1

percent, which is mainly caused by the increase in deposits in the Czech Republic as a result of the economic

recovery in this country. As a result of the decrease of loans against the increased level of deposits, loans to

20.9%

17.8%

14.6%

29.9%

16.7%

Central Europe Southeastern Europe Eastern Europe

RBI Group (Austr ia) Other

Figure 5. Structure of Raiffeisen Bank Ineternational, in percent



22 |

deposits ratio resulted in 113.8 percent in June 2015, representing a decrease of 11.7 percentage points

compared with the same period of the previous year.

With regard to the overall efficiency indicator, expressed through the expenditures to income ratio, the RBI

group worsened where the indicator reached 56.8 percent in June 2015, from 55.3 percent in June 2014

(figure 7). This increase of 1.5 percentage points is attributed to the faster decline of 11.0 percent of

operational income, compared to the decline of operational expenditures from 8.6 percent in June 2015. The

faster decline of the total operational income was mainly driven by interest income which marked a decline

of 12.0 percent, mainly driven by large currency fluctuations (depreciation of the Russian and Ukrainian

currency), the increase of non-performing loans in Asia, as well as the lower interest rates in Poland.

Within operating expenditures, personnel

expenditures were characterized by an annual

decline of 15.5 percent, while other administrative

expenditures marked a decline of 0.7 percent until

June 2015. During the first half of 2015, RBI has

allocated euro 24 million as additional assets for

loan loss provisions against for the segment of the

central office and for the branch in Russia as a

result of the unfavorable economic situation in

this country. In the branch of RBI in Ukraine,

loan loss provisions were lower mainly as an effect

of the currency depreciation. Until June 2015,

RBI group recorded a net profit of euro 288

million, marking an annual decline of 16.4

percent, which can be adversely affected by

economic performance in Russia and Ukraine. Despite the decrease of the profit, the ratio of return on

equity (ROE) recorded significant improvement, which in June 2015 stood at 11.0 percent (annualized),

which represents a significant increase compared with the rate of 0.2 percent as it was in 2014. The capital

adequacy ratio (CAR) in June 2015 stood at 16.6 percent, compared with a rate of 16.8 percent in June 2014,

which remains well above the 8 percent of the minimum as set by Basel III regulatory requirements (figure

7). Meanwhile, the nonperforming loans to total loans ratio in June 2015 increased to 11.9 percent compared

with 10.7 percent in June 2014. In June 2015, the coverage of non-performing loans by loan loss provisions

stood at 66.6 percent (65.3 percent in June 2014).

RBI continues to be the only of the three main banking groups operating in Kosovo that trades its shares on

the stock exchange. The share price of RBI on the Vienna Stock Exchange, in June 2015, decreased to euro

13.05, compared to euro 23.32, in June 2014. This decrease of the share price, among others, came as a

result of the economic instability in Ukraine and Russia.

Economic developments in the countries where the RBI group operates are expected to positively influence

the performance of the RBI group. Austria, despite the slower economic growth in this period, it is expected

that by the end of 2015 and in 2016 to have a faster pace of economic growth as a result of the increased

public expenditures that are designated for immigration. Similarly, Southeastern European economies in

2015 are expected to have higher economic growth. Positive growth trend is expected to continue in the

countries of Central Europe as a result of the economic growth in Germany which is the largest trading

partner of these countries. Meanwhile, Russia’s economic decline is expected to continue during 2016 as a

result of the continuation of sanctions and the declining oil prices. The low share of 0.68 percent of assets of

Raiffeisen Bank in Kosovo to total assets of the group suggests that the impact of the performance of

Raiffeisen Bank in Kosovo and the Kosovo’s macroeconomic environment impact on the group's performance

remains limited.

Nova Ljublanska Banka- NLB (Slovenia)

NLB banking group during the first half of 2015 was characterized by declining activity, compared to the

same period of the previous year, while financial performance and sustainability indicators marked an

improvement. In June 2015, the value of total assets of the group amounted to euro 11.6 billion,

representing an annual decline of 5.3 percent. Regarding the regional expansion of the group’s assets,

Slovenia represents the main market with 69.7 percent of total assets. Southeastern Europe also is a very

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015

Expenditures to income ratio *ROE CAR

Figura 7. Effeciency indicators of RBI, in percent

*ROE - 2015 is annualized



| 23

important market for the NLB group, given that 29.4 percent of the group's total assets are invested in this

region. The remainder assets of group is invested in West and Central Europe with a share of 0.9 percent

(figure 8). With a moderate economic growth

were characterized some Southeastern

European countries in which the group

operates, while the economy of Slovenia was

characterized by a higher economic growth as a

result of increased exports and strengthening

of the domestic demand for consumption.

However, despite the positive developments in

the macroeconomic environment, the banking

sector activity in Slovenia marked a decline,

including the NLB group, which being in the

restructuring phase was characterized by a

declining activity.

The NLB group followed the traditional

business model, as well, taking into account

that the activity of the group consists of lending and is financed by deposits. Similarly as the RBI group, the

NLB group during this period was characterized by a decline in lending activity, where in June 2015, the

value of total loans reached euro 9.0 billion, representing an annual decline of 4.5 percent. The decline was

mainly due to the process of restructuring of the banking sector in Slovenia as a result of over-indebtedness

and due the high level of non-performing loans on the balance sheets of the banks. With a decline were

characterized also deposits, the value of which

amounted to euro 8.7 billion in June 2015,

representing an annual decline of 0.5 percent

(figure 9). The more significant decline of loans,

along with the slight decline of deposits has

affected the loans to deposits ratio to be reduced

to 103.0 percent in June 2015 from 107.3 as it

was in June 2014.

NLB Group in the first half of 2015 improved the

efficiency and financial performance of the key

indicators. The overall efficiency indicator,

expressed through the expenditures to income

ratio, marked an annual decline of 0.4 percentage

points, decreasing to 59.5 percent in June 2015

(figure 9). This improvement is attributed to the significant reduction of loan loss provisions for 37.8

percent, while operating income marked a decline of 2.9 percent. Within revenues, interest income marked a

decline of 9.7 percent, while the income from

fees and commissions recorded a growth of 2.1

percent until June 2015. However, net interest

income and net income from fees and

commissions marked an increase as a result of

the reduction of expenditures on interest and

fees. Within operating expenditures, personnel

expenditures marked a decline of 2.1 percent

until June 2015, while general and

administrative expenditures marked a decline of

2.9 percent.

The group managed to close the first half of

2015 with a profit of euro 53.4 million (34.0

million in the first half 2014), which was

reflected in the return rate on equity (ROE)

(annualized) which recovered to 7.8 percent from 4.8 percent in 2014. In addition, the group has

69.7%

29.4%

0.9%

Slovenia Southeastern Europe Western and Centra l Europe

Figure 8. Structure of NLB Group assets, in percent

Source: Nova Ljubljanska Banka (2015)

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

June 2011 June 2012 June 2013 June 2014 June 2015

Loans (annual change) Deposits (annual change)

Figure 9. Growth of loans and deposits of NLB Group, in percent


-160%

-140%

-120%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015

Raporti i Shpenzimeve ndaj te Hyrave *ROE CAR

Figure 10. Effeciency indicators of NLB Group, in percent

*ROE - 2015 is anualized



24 |

strengthened the capitalization level expressed through the capital adequacy ratio (CAR), which reached

15.9 percent in June 2015 compared with 15.7 percent in June 2014 (figure 10). Positive development was

recorded also in the credit portfolio quality, where the non-performing loans to total loans ratio declined to

24.6 percent in June 2015 compared with 25.8 percent in June 2014. While the coverage of non-performing

loans by provisions in June 2015 was 69.4 percent compared to 70.7 percent in June 2014.


| 25

4. Kosovo’s Economy

Kosovo’s economy was characterized by

increased economic activity during the

first half of 2015. According to KAS, the

first quarter was characterized by an

annual growth of 0.2 percent, while in

the second quarter it was marked an

economic accelerated growth rate of 3.4

percent. The economic growth rate in the

first six months of 2015 is estimated to

have been generated mainly by

increased domestic demand, namely the

increase in consumption and

investments, while net exports

continued to contribute negatively to the

economic growth.

CBK forecasts for 2015 suggest an accelerated economic growth compared with the previous year.

The real GDP growth rate for 2015 is estimated to be 3.5 percent, compared with the growth of

1.2 percent that was recorded in 2014 (figure 11). The forecast for the growth in 2015 is largely

based on the growth of private investments and private consumption. However, unlike the

previous year, when investments and public consumption had decreased, these two categories are

expected to be characterized by growth until the end of 2015 compared to the previous year. The

higher real growth rate of imports of goods and services compared to exports is estimated to have

affected the contribution of net exports to real GDP growth to be negative.

In the first six months of 2015, Kosovo’s economy was characterized by price decline. The

inflation rate, expressed through the consumer price index (CPI) in the first half of 2015 was -0.4

percent (figure 12). The main contribution to the price decline was given by the category of

transport prices which had a negative impact with 1.7 percentage points, then the category of

furniture, clothing and footwear which had a negative impact with 1.2 percentage points each,

and health and education which contributed negatively with 0.4 and 0.2 pp, respectively.2 On the

other hand, food and non-alcoholic baverages contributed positively by 3.4 percentage points, and

energy by 1.8 percentage points.

In the first six months of 2015, the CPI components such as electricity, gas and other fuels

marked a price increase with an average of 4.9 percent, alcoholic beverages and tobacco with 3.4

percent and clothing and footwear with 1.9 percent. Same developments had also the prices of

non-alcoholic beverages, which increased by 1.1 percent. Food and non-alcoholic beverages

represent about 40.9 percent of the consumer basket in Kosovo. Conversely, a more significant

price decline was recorded in transport services with an average of 7.9 percent, which also gave

the main contribution to the overall decline of inflation. Transport services3 represent around

13.1 percent of the consumer basket, while the decline recorded in the prices of these services is

mainly attributed to the price decline of oil derivatives.

2 The calculation of the contribution of components of the CPI on the inflation level, except price movements, is based also on the weight that certain components have in

the CPI. It may happen that a certain category have increased prices but at the same time have marked a reduction weight in total CPI. In this case, if weight reduction is

higher than the price increase then the contribution is negative to the total contribution of CPI.

3 Transport services include the subcategories: purchase of cars; The usage of equipment for personal transport; and transport services.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2009 2010 2011 2012 2013 2014 2015

Figure 11. Real GDP growth rate, in percent

Source: KAS (2014) and CBK estimates for 2015


26 |

Due to the high dependence of the

Kosovo’s economy on imports, as well as

the relatively high share of tradable

goods and services in the consumer

basket, price movements in international

markets continue to be the main

determinant of price movements in the

country. The import price index recorded

an average annual decline of 0.4 percent

in the first half of 2015, while

manufacturing prices marked an

increase of 3.9 percent.

Until June 2015, the fiscal sector was

characterized by a growth of revenues

and expenditures compared to the previous year. Primary budget revenues until June 2015

reached a value of gross euro 661.2 million. If VAT returns of euro 15.0 million and other taxes

from the Tax Administration and Customs of Kosovo are deducted, the primary budget revenues

would reach net euro 646.1 million, representing an annual increase of 7.2 percent. On the other

hand, the total budget expenditures amounted to about euro 667.2 million representing an

annual increase of 5.8 percent. In the first six months of 2015, government current expenditures

reached a value of euro 544.4 million, representing an increase compared to the same period of

the previous year of 11.6 percent. Within current expenditures, with a higher growth were

characterized the category of wages and salaries (11.1 percent) and the category of subsidies and

transfers (19.5 percent). On the other hand, capital expenditures amounted to euro 115.6 million

in the first half of 2015, corresponding to an annual decline of 15.4 percent. Kosovo ’s budget

recorded a deficit of euro 21.1 million until June 2015 (euro 28.2 million in the same period of

2014). Until June of 2015, public debt reached euro 649.1 million or 11.2 percent of GDP,

compared with euro 554.5 million as it was in the same period of the previous year or 10.2

percent of GDP.

In the first half of 2015, the external sector in Kosovo was characterized by a growth of the

current account deficit and a recovery of the capital and financial account. The deficit in the

current and capital account recorded a value of euro 213.9 million in the first six months of 2015,

compared with a value of euro 192.5 million as it was in the same period of the previous year.

The deficit increase of the current and capital account mainly is attributed to the increase of the

deficit in the goods account, as well as

the decreases marked in the positive

balance of the services account and the

accounts of primary and secondary

income.

Kosovo’s economy was characterized by

an increase in commercial activity in the

first half of 2015, namely an increase of

the value of total exports and imports of

goods and services. However, despite the

increase of goods export up to 14.5

percent in the reporting period, the

increased value of imported goods by 5.1

percent has increased the trade deficit of goods for 3.7 percent (figure 13). This resulted due to

the higher weight of imports compared in exports of Kosovo’s foreign trade. Similar to export of

-2.6

1.4

9.6

1.5 2.70.3 -0.4

-15

Qer 2009 Qer 2010 Qer 2011 Qer 2012 Qer 2013 Qer 2014 Qer 2015Food and non-alcoholic beveragesAlcoholic beverages and tobaccoEnergyEducationHealth

Figure 12. Inflation and its main contributors, annual growth in percent

Source: KAS and CBK calculations (2015)

-800

-600

-400

-200

0

200

400

600

800

1000

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2

2008 2009 2010 2011 2012 2013 2014 2015

Trade balance Exports Imports

Figure 13. Imports, exports and trade balance, non-cummulative in millions of euro

Source: KAS (2015)


| 27

goods, also the export of services was characterized by an increase of 10.8 percent in the first half

of 2015, but the faster growth of the value of imported services by 24.2 percent led to a decrease

of the positive balance of services by 3.9 percent.

The category of the secondary income continues to affect the reduction of the current account

deficit and capital balance of payments of Kosovo. Remittances, as one of the main components of

the current account, increased by 15.8 percent in the first six months of 2015 and reached a value

of euro 337.2 million.

Within the balance of payments, financial account recorded a balance of euro -154.5 million in

the first six months of 2015 compared with the balance of euro -82.4 million in the same period of

2014. Within liabilities, the main category remains the category of FDI, whereas the main

category within assets continues to be other investments (mainly deposits and commercial loans)

outside Kosovo's economy. FDI balance was characterized by improvement in 2015, mainly as a

result of the FDI growth in the country at 153.1 million by June 2015, from 39.1 million euros as

they were in the same period of 2014.

The financial system was characterized by the expansion of its activity and a high level of

sustainability in all its constituent sectors. The role of the banking sector in the financing of the

economic activity strengthened in 2015. The increase of lending activity during this period,

driven by supply as well as demand side, has further supported the growth of consumption and

private investments.

In the first six months of 2015 a total of 5,069 new companies were registered or 241 companies

fewer than in the same period of the previous year, whereas 936 companies were closed or 55

companies more than in the same period of the previous year. The structure of newly registered

enterprises is similar to the previous year’s structure, dominated by enterprises in sectors such

as trade, hotels, manufacturing, construction and agriculture. In the first six months of 2015,

with the reduction in the number of registered businesses was characterized the trade sector (56

enterprises fewer), manufacturing (29), construction (61), hotels (59) and professional activities

(43 companies fewer). Meanwhile, sectors that are characterized by an increased number of

registered enterprises were agriculture (76 more companies), health (14), financial activities (7),

power supply (6) and transport (5 enterprises more).

CBK Forecasts for 2016 suggest that the Kosovo’s economy will have a higher growth compared

with 2015. This increase as in 2015 is expected to be generated by domestic demand, while net

exports are expected to continue to have a negative contribution GDP growth. Consumption, as

the main component of domestic demand, it is expected that during 2016 will have the major

contribution to the economic growth. Investments, unlike 2015, are expected to be characterized

by a significant increase in public investments. Also, the reduction of interest rates and eased

lending standards for approving loans by banks are expected to have significant impact in

encouraging the private sector investments. Also FDIs, which were characterized by significant

growth in 2015, are expected to contribute to the growth of total investments. Net exports are

expected to continue to have a negative impact on GDP growth.


28 |

5. Kosovo’s Financial System

5.1. General Characteristics

Kosovo’s financial system during the first half of 2015 was characterized by further expansion of

its activity, albeit at a slower pace. The value of total assets of the system in June 2015

amounted to euro 4.73 billion, corresponding to an annual growth of 9.5 percent (figure 14). This

increase is attributed to a considerable expansion of commercial banks and pension funds

activity. Smaller contribution was given by the insurance sector, while the effect of the

microfinance sector and financial auxiliaries, was quite low, regardless their business growth.

The structure of the financial system

continues to be dominated by the

banking and pension sector, which in

June 2015 accounted for 69.1 percent

and 25.0 percent of total assets of the

system (figure 15). Consequently, the

slowdown in growth of the total financial

system assets mainly reflects the slower

growth of these two sectors. During this

period, the pension sector recorded the

highest annual growth rate of assets

with 18.1 percent, followed by the

banking sector which was characterized

by an annual increase of 6.9 percent. The

third component by size of assets is the

insurance sector, which in June 2015

increased its share to total financial

system assets to 3.2 percent. The

insurance sector in June 2015 recorded

an annual growth of 11.5 percent,

becoming one of two constituent sectors

of the financial sector which during this

period was characterized by an

accelerated increase of its activity.

The microfinance sector, which follows

the insurance sector with a share of 2.5

percent to total financial system assets

during this period marked an accelerated increased activity. Assets of microfinance sector, in

June 2015, recorded an annual growth of 2.8 percent. The weight of financial auxiliaries to the

whole financial system continues to be low with a share of only 0.2 percent of total financial

system assets, despite its annual growth of 12.6 percent recorded in June 2015.

-13%

-8%

-3%

2%

7%

12%

17%

22%

27%

June 2012 June 2013 June 2014 June 2015

Financial system Banking sector Pension sector

Insurance sector Microfinance sector

Figure 14. Financial system assets and its constituent sectors, annual change

Source: CBK (2015)

70.8%

3.1%

2.6%0.2%

23.2%

Qershor 2014

Banks

Insurances

Microfinance

69.1%

3.2%

2.5%

0.2%

25.0%

Qershor 2015

Banks

Insurances

Microfinance

Figure 15. Structure of assets of the financial system

Source: CBK (2015)


| 29

Financial intermediation in the country,

calculated as the financial system assets

to GDP ratio has expanded during this

period, although with a slower pace. In

June 2015, the rate of financial

intermediation in the country has

increased to 82.7 percent compared with

78.8 percent in the same period of the

previous year. The expansion reflects the

positive developments of the constituent

majority of the sectors, except the

microfinance sector, which was

characterized by a slight decrease of the

share to the financial intermediation.

Pension sector and the banking sector marked a higher growth rate of their weight in financial

intermediation in the country, while the insurance sector marked a slighter increase of the share

(figure 16).

Despite the increase, the level of

financial intermediation of the banking

sector in Kosovo continues to be

relatively low compared with the

countries in the region (figure 17). Based

on this, it can be implied that, in relation

to the size of the economy, the financial

sector of Kosovo has still room for growth

of the financial intermediation in order

to converge with the average of other

regional countries.

The structure of the financial system has

expanded also in terms of the number of

financial institutions operating in the country. Until June 2015, two new insurance companies

entered in the domestic market with domestic capital. Also, the number of financial auxiliaries

reached to 43 from 41 as they were in June 2014. Meanwhile, the number of commercial banks,

pension funds and microfinance institutions remained unchanged. From a total of 88 financial

institutions licensed to operate in the country, the majority of them consist of microfinance

institutions and financial auxiliaries, the total number of which reached 61, in June 2015 (table

1).

Table 1. Number of fiancial institutions4

Source: CBK (2015)

4 The number of financial institutions represents the number of institutions that are licensed to operate in Kosovo market.

0%

10%

20%

30%

40%

50%

60%

70%

Banking sector Pension sector Insurance sector Microfinance sector


Figure 16. Financial intermediation rate by sectors in Kosovo

Source: CBK (2015)

20%

40%

60%

80%

100%

120%

140%


Figure 17. Finanical intermediation rate of the banking sector in the region

Source: Central Banks of the region (2015)

Description June 2012 June 2013 June 2014 June 2015

Commercial banks 8 9 10 10

Insurance company 13 13 13 15

Pension funds 2 2 2 2

Financial auxiliaries 39 40 41 43

Microfinance institutions 19 18 18 18


30 |

5.2 The exposure of external sector5

In June 2015, the value of investments in the external sector amounted to euro 1.63 billion,

recording an annual increase of 22.0 percent.6 The accelerated growth was mainly due to the

increase of pension fund investments in

the external sector.

The structure of external assets consists

mainly of assets and other equities with

a share of 64.8 percent, followed by

deposits with a share of 16.0 percent and

securities with a share of 14.1 percent.

The remainder is represented by loans

with 5.0 percent and other assets with

0.2 percent (figure 18).

Within the total foreign assets, the

highest annual growth of 40.3 percent

was recorded by assets and equities,

followed by bank deposits held in the external sector, which marked a growth of 20.2 percent.

The growth of assets and other equities invested in the external sector was due to the withdrawal

of most of the assets that Kosovo Pension Savings Fund was holding at the CBK which were

invested in the external sector. Meanwhile, the growth investments in deposits in the external

sector was as a result of the funds placement by commercial banks to other alternatives such as

deposits in the external sector in terms of the high liquidity level in the country. On the other

hand, investments in other categories in the external sector were characterized by a decline, of

which the highest declining rate of 31.8 percent was recorded by loans, followed by investments

in securities, which marked a considerably lower decline of 5.2 percent. The decline in these

categories among others may reflect an accelerated growth rate of bank lending in the country as

well as the more favorable interest rates on Kosovo’s government securities compared with the

return on securities in foreign markets.

The value of total liabilities to the

external sector in June 2015 amounted

to euro 266.6 million, marking an

annual increase of 3.3 percent. The

structure of external liabilities

continues to be dominated by loans with

a share of 62.9 percent, followed by

deposits with 35.3 percent and other

liabilities with a share of 1.8 percent

(figure 19). Consequently, the growth

slowdown of total external liabilities

was reflected by the slower growth of

deposits and loans from the external

sector. In June 2015, the loans received from the external sector recorded a growth of 4.2 percent,

compared with the growth of 23.2 percent in June 2014. The significant slowdown may be a

result of the presence of sufficient liquidity in the banking sector. The category of deposit in June

5 In this context, the financial system does not include the Central Bank of the Republic of Kosovo.

6 Within the requirements of Kosovo financial system to the external sector it is not included "cash" category. In monetary and financial statistics the "cash" category is

considered as external asset (requirement to non-residents), due to the fact that euro is not national currency of Kosovo, but in this analysis these means are considered

as such since they are kept in banks in Kosovo.

5.5%

12.4%10.2%

22.0%

0%

5%

10%

15%

20%

25%

30%

0%

20%

40%

60%

80%

100%


Deposits Securities other than shares

Loans Assets and other equit ies

Other Annual change (right axis)

Figure 18. Structure of foreign claims, in percent

Source: CBK (2015)

-28.2%

-1.5%

21.1%

3.3%

-35%

-25%

-15%

-5%

5%

15%

25%

0%

20%

40%

60%

80%

100%


Deposits Loans Other Annual change (right axis)

Figure 19. Structure of foreign liabilities, in percent

Source: CBK (2015)


| 31

2015 recorded an annual increase of 1.3 percent compared with the annual growth of 20.2

percent recorded in June 2014. The slowdown in the growth of non-resident deposits may have

been impacted mainly by the low interest rates on deposits in Kosovo’s banking sector during the

past two years.

Consequently, the value of net foreign assets (NFA) of the Kosovo’s financial system in June 2015

reached euro 1.36 billion, marking an annual increase of 26.5 percent. Pension funds continue to

represent the largest share of NFA (77.7 percent), hence had the main contribution to the growth

of total NFA. Positive balance of total NFA is also contributed by the NFA of the banking sector

with a share of 26.8 percent, while microfinance sector’s NFA was the only segment which

recorded a negative balance of -4.6 percent of total financial system NFA, which is a result of the

high dependence of these institutions to external financing through credit lines (figure 19).

Total exposure of the financial system to the external sector continues to be more pronounced

within assets, in addition to lower exposure within liabilities. More specifically, foreign assets to

total assets ratio of the financial system in June 2015 reached 34.5 percent (25.0 percent in June

2014), while the external liabilities to total liabilities ratio of the system stood at 5.6 percent (6.0

percent in June 2014 ) (figure 20).

In terms of sectors, the banking sector

continues to have the lowest net

exposure to the external sector. The

foreign assets to total assets ratio of the

banking sector is 17.4 percent, while the

external liabilities to total liabilities

ratio of the sector was 6.2 percent.

Within the banking sector, the large

banks seem to be more exposed to the

external sector compared to smaller

banks, in terms of assets liabilities as

well. This reflects the fact that larger

banks, which are mostly foreign banks,

have a higher degree of interaction with

the external sector, and particularly with their parent banks.

Pension funds sector continues to be exposed to the external sector assets. In June 2015, assets

invested abroad accounted for 89.5 percent of total assets of the pension sector. Unlike other

sectors, the microfinance sector is exposed only in terms of liabilities and until June the level of

exposure reached 53.6 percent of total liabilities. The microfinance sector has high exposure

within liabilities due to the usage of foreign credit lines in order to fund the lending activity,

given that MFIs do not have the legal right to accept deposits.

0%

10%

20%

30%

40%

50%

60%

70%

80%

*Financial system Banking sector Pension sector Microfinance sector

Foreign assets/Tota l assets Foreign liabilities/total liabilities

Figure 20. Foreign exposure by financial sectors

*Financial system does not include the CBK

Source: CBK (2015)


32 |

6. Kosovo’s Banking Sector

6.1 Structure of the Banking Sector

Banks with foreign ownership continue to dominate the banking sector, where out of ten banks

licensed to operate in the country, eight of them belong to foreign ownership and manage 90.4

percent of total assets and own 93.0 percent of total banking sector capital. As regards to the

country of origin, Austria, Germany,

Slovenia, Albania and Serbia are

represented with a single bank each,

while Turkey is represented by three

banks7 (figure 21). In the banking sector

operate also two domestically owned

banks.

The banking sector continued to be

characterized by decreasing the level of

concentration in the market during the

first half of 2015. The share of the three

largest banks to total assets of the

sector, in June 2015, declined to 65.3

percent compared with 67.2 percent in

the previous year.

The decline in concentration is observed

also through the Herfindahl-Hirschman

Index (HHI), which shows a steady

decline of concentration in terms of

assets, loans and deposits during the

past four years (figure 22). The

concentration decline was more

pronounced in loans and assets as a

result of the faster growth of the small

banks activity compared with the slower

growth of the three largest banks.

The three largest banks in June 2015

recorded an annual growth of 0.8 percent

of loans and a growth of assets of 3.9 percent, compared with the annual growth of 17.4 percent

of loans and 13.0 percent in assets of other banks. The concentration decline is evident also in

deposits, but with a slower pace. In June 2015, deposits of the three largest banks recorded a

growth of 4.6 percent, compared with the growth of 9.9 percent in other banks.

7 With “banks” it is meant the subsidiaries and foreign branches that are licensed to operate in Kosovo.

9.6% 12.7% 13.8% 14.9%

10.9%10.8% 9.5% 9.6%

30.8% 28.9% 26.4% 24.8%

25.3% 23.6% 24.9% 25.5%

15.9% 15.2% 15.9% 15.0%

5.7% 6.9% 7.7% 8.3%


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Turkey Kosovo Germany Austria Slovenia Serbia Albania

Figura 21. Structure of commercial banks, by ownership

Source: CBK (2015)

1750

1800

1850

1900

1950

2000

2050

2100

2150


Assets (HHI) Loans (HHI) Deposits (HHI)

Figure 22. Concentration level in the banking sector

Source: CBK (2015)


| 33

6.2. Activity of the Banking Sector

6.2.1. Assets

The value of assets of the banking sector

in June 2015 amounted to euro 3.27

billion, marking an annual increase of

6.9 percent (9.8 percent in June 2014)

(figure 23). The highest contribution to

the growth of the sector’s assets was

given by the expansion of the loan

portfolio which continues to be the

dominant category of the banking

activity. However, assets growth of the

banking sector slowed down in

comparison to the previous year which

mainly may be due to the slowdown of

the deposits growth, which at the same

time represent the main source of financing of the banking activity.

Structure of the banking sector assets has not marked significant changes compared to the

previous periods, taking into account that the majority of the banking sector assets (85.4 percent)

remain invested in instruments which bring profit such as loans, securities and the balance with

commercial banks. The share of the category of the balance with commercial banks to total assets

remained similar to the same period of the previous year, while the categories of cash and

securities were characterized by a slight increase in their share. On the other hand, the main

category of assets, represented by loans, marked a slight decline in their share to total assets of

the banking sector (table 2). Despite the slight movements, the increase in the share of securities

against the decline in the share of loans to total assets of the sector suggests a more pronounced

orientation of banks towards diversifying their portfolios.

Table 2. Structure of the banking sector

Source: CBK (2015)

Within the structure of the banking sector assets, besides the category of loans which marked an

increased accelerated growth of 6.1 percent (3.5 percent in June 2014) also the category of cash

and balance with the CBK was characterized by an annual accelerated growth rate of 11.0

percent in June 2015 (0.8 percent in June 2014) (figure 24). The growth of the latter was mainly

a result of the annual growth of 12.6 percent of commercial banks’ reserves at the CBK. The

category of the balance with commercial banks, which includes deposits and credit lines with

banks abroad, marked an increase of 7.3 percent low speed (22.0 percent in June 2014). This

slowdown was due to the significant reduction of time deposits in non-euro currency that may be

0%

2%

4%

6%

8%

10%

12%

0

500

1,000

1,500

2,000

2,500

3,000

3,500


In m

illions o

f euro

Cash and b alance with the CBK Balance wit h comm ercial banks

Securitie s Gross loans

Fixed asset s Other assets

Annual change of total assets (right ax is)

Figure 23. Structure of the banking sector assets

Source: CBK (2015)

In millions of

euro Share (%)

In millions of

euro Share (%)

In millions of

euro Share (%)

In millions of

euro Share (%)

Cash and balance w ith the CBK 298.4 11.3% 355.4 12.8% 358.2 11.7% 397.4 12.2%

Commercial banks 265.3 10.0% 261.4 9.4% 318.7 10.4% 341.9 10.5%

Securities 215.6 8.1% 246.3 8.8% 405.3 13.2% 443.8 13.6%

Gross loans 1,776.3 67.0% 1,825.7 65.5% 1,889.9 61.8% 2,005.2 61.3%

Fixed assets 49.9 1.9% 57.6 2.1% 55.2 1.8% 52.7 1.6%

Other assets 46.9 1.8% 40.5 1.5% 32.2 1.1% 28.6 0.9%

Total 2,652.3 100% 2,787.0 100% 3,059.5 100% 3,269.6 100%

Description



34 |

the effect of the euro depreciation in relation to other currencies (the US dollar, Swiss franc, etc.)

in late 2014 and early 2015.

The category of investments in

securities, in June 2015, amounted to

euro 443.8 million, corresponding to an

annual growth of 9.5 percent, but slower

compared to the previous year (64.5

percent recorded in June 2014). Within

the investments structure of commercial

banks in securities, Kosovo’s government

continues to increase investments in

securities. In June 2015, Kosovo’s

Government investments in securities

recorded an annual growth of 31.1

percent, increasing its share to total

portfolio investments of securities at

49.2 percent (figure 25). The increasing

investments in securities of the Kosovo’s

Government was primarily a result of

higher interest rates offered by these

investments compared with the interest

rates on securities of foreign

governments. It is worth mentioning

that the simple average interest rate on

securities of the Kosovo’s Government

increased to 1.8 percent in the first half

of 2015, compared with the rate of 1.3

percent in the same period of 2014.

Meanwhile, the simple average interest

rate of the foreign government securities8 until June 2015 was 0.05 percent compared with the

rate of 1.1 percent as it was until June 2014.

On the other hand, investments in securities in the external sector, which mainly consist of

foreign government bonds, marked a decline of 5.7 percent, decreasing their share to 50.7 percent

in the total portfolio of investments in securities. This decrease was driven by significant

reduction of interest rates compared to the same period of the previous year. Investments in

securities of other financial and non-financial corporations, which are considered as instruments

with a higher degree of risk, have a lower share in the portfolio of securities investments (0.1

percent in June 2015), implying that banks avoid investments with higher risk.

Loans

Loans remain the most important category of assets of the banking sector, with a share of 61.3

percent of total assets of the sector. Lending activity of the banking sector increased with an

accelerated growth pace during the first half of 2015. In June 2015, the value of total loans

amounted to euro 2.01 billion, representing an annual increase of 6.1 percent (3.5 percent in June

2014) (figure 26). The expansion of the lending activity among others was influenced by increased

demand of enterprises for expansion of their operational capacity, and by the increased level of

consumption by households (box 3).

8 In calculation of the average interest rate for foreign governments were included the following countries: Germany, France, Belgium and Italy and Spain.

-25%

-10%

5%

20%

35%

50%

65%


Gross loans Securitie s

Balance wit h comm ercial banks Cash and b alance with the CBK

Figure 24. Assets of the banking sector, annual change

Source: CBK (2015)

40.3% 41.1%49.2%

86.2%

59.7%58.9% 50.7%

0%

20%

40%

60%

80%

100%

June 2012 June 2013 June 2014 June 2015Other financial and nonfinancial corporat ions

Foreign governments

Kosovo's Government

Figure 25. Structure of securities, in percent

Source: CBK (2015)


| 35

Structure of total loans continues to be dominated by loans intended for enterprises, which in

June 2015 represented 66.7 percent of total loans. Loans to enterprises during the past three

years were characterized by slower

growth where in June 2015 recorded an

annual growth of 5.2 percent (2.9

percent in June 2014). However, the

main contribution to the accelerated

growth of total loans was given by loans

intended for households, which comprise

33.0 percent of total loans and recorded

a growth of 11.4 percent, compared with

the growth of 5.6 percent in June 2014.

Other loans, which account for loans to

non-governmental organizations and

loans in non-euro currency represent 0.3

percent of total loans, representing a

decline of 4.9 percent in June 2015. Loans to non-residents in June 2015 decreased their share to

total loans at 0.02 percent (1.0 percent in June 2014) as a result of the sharp annual decline of

98.1 percent which was mainly due to the maturity of the majority of loans.

Despite the accelerated growth of total loans, new loans issued by the banking sector in the first

half of 2015 were characterized by an annual increase of 8.5 percent compared with the annual

growth of 39.4 percent recorded in the first half of 2014 (box 2 ). The significant growth recorded

in the previous year was a result of the increased demand due to the wage increases in the public

sector on one hand and to the growth of supply by easing the standards and terms of lending by

the banks on the other side, but it also had to do with the base effect, because the accelerated

growth of new loans in 2014 has come after several years of decrease of new loans.

Box 2. New loans

The total value of new loans issued by the banking sector until June 2015 amounted to euro 555.9 million,

marking an annual increase of 8.5 percent (figure 27). New loans are dominated by loans to enterprises,

which until June 2015 represented 62.7 percent of total new loans and recorded a growth of 4.7 percent

(figure 28).

While new loans intended for households constituted 37.3 percent of total new loans and recorded a growth

of 15.6 percent (figure 29).

The structure of new loans to enterprises consists of investment loans, non-investment loans and loans with

favorable conditions. Investment loans continue to dominate with a share of 64.0 percent to total new loans

9.3%

2.8%

3.5%

6.1%

-13.5%

-2.0%

39.4%

8.5%

-20%

-10%

0%

10%

20%

30%

40%

50%


Total loans New loans

Source: CBK (2015)

Figure 27. Total loans and new loans, annual change

0

50

100

150

200

250

300

350


New loans to enterprises New loans to households

Source: CBK (2015)

Figure 28. New loans, in millions of euro

-2%

0%

2%

4%

6%

8%

10%

-2%

0%

2%

4%

6%

8%

10%


Other Households

Enterprises Annual grow th rate of loa ns (right axis)

Figure 26. Contribution to loans growth by sectors, in percentage points

Source: CBK (2015)


36 |

to enterprises (figure 30). Non-investment loans and those with favorable conditions until June 2015

represented 30.0 percent and 6.0 percent, respectively, of total new loans issued to enterprises.

The structure of new loans issued to households consists mainly of consumer loans, mortgage loans and

loans with favorable conditions. Consumer loans until June 2015 had a share of 72.4 percent of total new

loans to households (76.3 percent as of June 2014). Mortgage loans and those with favorable conditions

during this period increased their share to total new loans to households. Mortgage loans had a share of

15.8 percent of total new loans to households (12.9 percent in June 2014), while loans with favorable

conditions had a share of 8.3 percent (7.6 percent in June 2014).

In order to identify and compare the effects of new loans, returned loans, and write-off loans to the increase

of the stock of total active loans, in figure 31 are presented trends of these three categories. All three

categories have different impact on the value of total active loans, where new loans positively affect the

growth of this amount, while the return of loans and write-offs have negative or decreasing effect on the

value of total active loans.

The value of new loans accumulated during the first half of 2015 recorded a slower annual growth compared

with the significant increase over the same period of the previous year. On the other hand, returned loans

and write-off loans during this period marked an annual decline of 1.6 percent and 2.8 percent, respectively.

The annual decline of returned loans reflects the movements in the maturity of the total active loans. Loans

with longer maturity increased their share while those with shorter maturities decreased their share to

total active loans. In June 2015, the amount of returned loans and write-off loans to new loans ratio

decreased to 79.3 percent compared to 87.5

percent until June 2014. The reduction of the

share of returned loans and write-off loans to

total new loans ratio, has a positive effect on

the growth of total stock of active loans.

The write-off loans to total new loans ratio

decreased to 1.4 percent from 1.5 percent as it

was in June 2014, which means that the impact

of write-off loans in 'removing' the effect of new

loans in the growth of total active loans marked

a decrease. Also, the ratio of loans to total loans

returned to New decreased to 77.9 percent from

85.9 percent as it was until June 2014, thus

contributing positively to the growth of total

stock of loans during this period.

Also, the returned loans to total new loans ratio decreased to 77.9 percent from 85.9 percent as it was until

June 2014, thus contributing positively to the growth of total loans stock during this period.

The amount of returned loans and write-off loans to new loans ratio until June 2015 marked a decrease in

enterprise and household loans as well, but the reduction was significantly lower in household loans.

-17.4%

-6.5%

53.9%

4.7%-6.2%

5.4%

18.7%15.6%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%


New loans to enterprises New loans to households

Source: CBK (2015)

Figure 29. New loans by sectors, annual change

63.6%

27.8%

8.7%

76.3%

12.9%7.6%

64.0%

30.0%

6.0%

72.4%

15.8%

8.3%

0%

15%

30%

45%

60%

75%

90%

Investing Non-investing Favourable Consumer Mortgage Favourable

Loans to enterprises Loans to households

June 2014 June 2015

Source: CBK (2015)

Figure 30. New loans by sectors and purpose of use

0

300

600

900

1,200

1,500

1,800

2,100


Total loans New loans Paid loans Write offs

Source: CBK (2015)

Figure 31. Total loans, new loans, paid loans and outstanding loans, in millions of euro


| 37

Box 3. Bank Lending Survey9

The results of the latest bank lending survey reflect developments in bank lending activity during the

period of March to September 2015, and the expectations of changes in lending activity in the period from

October to March 2016.

Lending activity in the country, in the period March-September 2015 was characterized by an accelerated

pace of growth. Unlike other countries in the region of the Central and Southeastern Europe, in which the

lending conditions continue to remain tight and the demand for loans is still low, the dynamics of lending in

Kosovo during 2015 is estimated to have been at the highest level in the past three years. The accelerated

trend of loans growth that characterized 2015 is attributed to eased lending of supply side of banks to

enterprises and households, as well as the higher demand for loans from both sectors.

The eased supply side of lending is generally attributed to eased lending standards by commercial banks in

the country, especially for loans to small and medium enterprises (SMEs) and for consumer loans during

this period. Banks declared eased lending standards in particular for long-term loans. Increased support for

SMEs by easing lending standards, especially for sectors which were less credited previously, as agriculture

and industry, as well as the increased long-term lending shows a gradual movement of banks from a more

conservative approach towards alternatives that enable a larger expansion of their businesses.

Standards for loans issued to households, during the period of March to September 2015, eased somewhat.

If lending standards by usage are analyzed, it is noted that banks have eased lending standards for

consumer loans. Eased lending standards were applied also for loans for house purchase. The main factors

explaining the bank eased lending policies during March - August 2015 were satisfactory liquidity position

of commercial banks, competition in the financial system and the improvement of loan portfolio quality.

Continued growth of deposits and further improvement of loans quality in the subsequent periods are

expected to be important generators in the lending dynamics in the country.

The eased lending policy of banks for enterprises and households during the period from March to August

2015 is implemented mainly through the reduction of average interest rates on loans, providing loans with

longer term of maturities and increasing the amount of loans issued.

In line with expectations stated in the previous survey, banks reported an increase in demand for loans

from companies and households during the period from March to August 2015. Regarding loans demand by

enterprises, banks reported an increase in demand particularly from SMEs. As regards to the purpose of

usage, banks reported a more significant increase in demand for consumer loans by households, while a

slight increase was registered also for house purchase loans. Concerning loans to households, as well as

loans to enterprises, the increased demand was higher for loans with longer term of maturities. Growth in

demand for household loans was in line with domestic consumption growth during this period, while the

increase in the demand for SME loans in the reporting period may have been influenced by the decline of

interest rates on bank loans.

Increased demand for loans by enterprises was reported to have occurred mainly in order to finance fixed

enterprise investments, financing the working capital and debt restructuring. Meanwhile, increased

demand from households mainly was attributed to increased consumer confidence, increased consumer

expenditures and other developments in the real estate market.

Regarding the quality of loan applications received in the period from March to September 2015, banks

declared to some extent improved the quality of SME applications. Also, better quality was reported as

regards to applications received for consumer loans as well as for long-term loans, which to some extent may

explain the higher willingness of banks to increase loans for these categories.

Regarding banks’ expectations for developments in lending activity in the next six months (September 2015

- February 2016), the lending supply, expressed through lending applied standards, is expected to remain

9 Bank Lending Survey is carried out by the Central Bank of the Republic of Kosovo with banks operating in Kosovo. The survey is conducted twice a year, covering the

period from March to September and the period from October to February.


38 |

generally unchanged. Regarding the approval loans applications, banks expect no significant changes in the

next six months; although an easier access to bank financing are expected to continue to have SMEs. In the

period of September 2015 - February 2016, banks have stated that they expect an increased demand for

loans. Demand for loans is expected to be higher by SMEs within enterprises, loans for house purchase

within the household loans, and long-term loans as regards to the maturity.

Loans structure by economic activity

The structure of loans to enterprises by

economic activity remains similar to

previous years (figure 32). Loans

intended for the trade sector represent

the largest category with a share of 54.0

percent of total loans to enterprises,

followed by loans intended for industry

(mining, manufacturing, energy, and

construction) with a share of 23.2

percent in June 2015. The sector of other

services (hotels and restaurants, other

financial services etc.) had a share of

19.0 percent, while the agricultural

sector continues to have the lowest access to bank loans with a share of 3.8 percent of total loans

to enterprises.

During the first half of 2015, economic sectors that increased the level of loans were trade sector,

manufacturing, agriculture and energy. Besides the factors related to supply side of lending (box

3), increased lending to these sectors can be attributed also to the demand for loans from these

economic sectors, taking into account that the total number of newly registered businesses, 30.3

percent of them belonged to the trade sector, 10.6 percent to manufacturing and 9.2 percent to

agricultural sector.

Despite of remaining the sector with the

lowest access to bank financing,

agriculture represented the sector with

the highest annual growth of loans,

which indicates the increased attention

of the banking sector to this sector.

Agriculture loans recorded an annual

growth of 12.2 percent in June 2015,

unlike the annual decline of 5.6 percent

marked in June of the previous year.

Acceleration may reflect mainly the

effect of demand taking into account that

during this six-month period was marked

an increase of 19.4 percent of newly registered enterprises in the agricultural sector. Also, there

were marked significant decreases of interest rates for this economic sector that may have

encouraged investments in the sector during this period. It is worth mentioning that the supply

effects are observed more in long-term lending to the agricultural sector, which is characterized

with one-digit interest rates and the statements of banks, according to which, there were marked

eased long-term lending standards for the sector.

18.5% 19.1% 20.3% 19.0%

53.1% 53.2% 52.2% 54.0%

24.8% 23.8% 23.9% 23.2%

3.6% 3.9% 3.6% 3.8%

0%

20%

40%

60%

80%

100%


Agriculture Industry Trade Other services

Figure 32. Structure of loans by economic activity, in percent

Source: CBK (2015)

5.9% 7.3% 6.7% 6.0%

46.2% 44.2% 50.0% 54.1%

4.7% 5.5%6.0%

6.6%

43.2% 43.0%37.3% 33.3%

0%

20%

40%

60%

80%

100%


Construction Energy Manufacturing Mining

Figure 33. Loans to industrial sector, in percent

Source: CBK (2015)


| 39

Loans issued to the energy sector, representing 6.6 percent of loans to the industrial sector

(figure 33) represent the economic sector which is constantly characterized by faster growth in

lending in the recent years. In June 2015, lending to the energy sector recorded an annual

growth of 12.2 percent (12.7 percent in June 2014). The increase can be mainly a result of

increased demand given the high interest in investing in this sector.

Loans intended for the manufacturing

sector in June 2015 recorded an annual

growth of 10.6 percent (16.9 percent in

June 2014), which represents one of the

sectors with the highest growth in

lending during this period, taking into

account the quite high weight to total

loans by economic activity (figure 34).

Double-digit growth rate of lending over

the past two years reflects the positive

performance of the manufacturing sector

expressed through the industrial

circulation index (processing industry)

that has increased during the second

quarter of 2015 compared with the first quarter. Also, the relatively high share of the sector to

total new businesses registered (10.6 percent in the first half of 2015) may be an indicator of

increased investments in this sector, which could be translated into increased demand for having

access to the bank financing.

Loans intended for trade sector, after three years of the slowdown growth, in June 2015 was

marked an increase of 8.8 percent (an increase of 1.0 in June 2014). The acceleration, among

other issues, reflects the increased commercial activity between Kosovo and other countries.

Another influencing factor was the large number of new businesses registered in the trade sector.

On the other hand, loans to the sectors of construction, mining and other services declined in

June 2015 despite the interest rate decrease for these economic sectors and eased lending

standards for enterprises from banks. Lending to the construction sector continues to decline for

the third sequential year, where in June 2015, loans to the construction sector marked a decline

of 9.0 percent compared with the decline of 10.3 percent in June 2014. The decline may be a

result of the decreased activity in the construction sector over the past three years. However,

during the second quarter of 2015 there is observed an increased activity in the construction

sector which may have had an impact on the slower decrease of lending compared to the previous

year. These developments in the construction sector activity may suggest a possible increase in

lending in the following periods.

Loans to the mining sector marked a decline of 8.5 percent in June 2015 (a decrease of 4.8

percent in June 2014). The decline in the activity of the mining sector reflects also the

developments decrease of the sector presented by the industrial circulation index.

Structure of loans by maturity

Structure of loans by maturity generally remains similar to previous years. In June 2015, loans

with maturity 'over 2 years' represented the largest share of total loans with 70.0 percent (figure

35). Unlike the two previous years, when the share of long-term loans to total loans had marked

a decrease, in June 2015 it was recorded an increase in the share of this category to total loans.

The expansion is in line with statements of the banks which have eased the access to loans with

longer maturities, as a measure in order to ease bank financing of businesses and households. At

-18%

-8%

2%

12%

22%

32%

42%


Agriculture Construction Energy Manufacturing

Mining Trade Other services

Figure 34. Loans by economic activity, annual change

Source: CBK (2015)


40 |

the same time, long-term loans were characterized by a lower interest rates compared with short-

term lending.

Medium-term loans with maturity of “1

to 2 years” expanded their share to 8.6

percent in June 2015 as a result of the

annual increase of 24.7 percent

compared with the decline of 3.0 percent

in June 2014 (figure 36). While short-

term loans with maturity of “up to 1

year”, continued to be the second-largest

category with a share of 21.4 percent of

total loans. These loans marked an

annual decline of 9.4 percent in June

2015 which may be a result of demand

decline for these loans compared to a

more favorable supply side for long-term

loans.

Lending growth of long-term loans is

expressed in lending to enterprises and

households as well. Within lending to

enterprises, the increase is more

significant in the sectors of agriculture,

manufacturing and trade. These

developments may reflect the orientation

of banks in providing loans with more

favorable interest rates and conditions

on long-term loans which may have

driven an increase in demand for these

loans. Moreover, the rapid developments

of mortgage loans during this period may

have contributed to the increased share of loans with long maturity, considering that 97.0

percent of new mortgage loans have maturities of “over 2 years”.

6.2.2. Liabilities

The structure of liabilities of the banking sector continues to be dominated by deposits, which

represent the main source of financing for commercial banks. In June 2015, deposits represented

78.7 percent of total liabilities of the banking sector (table 3). The high reliance on deposits as a

stable source of funding prevents exposure to movements in foreign markets.

The second category by share to total liabilities of the sector account for own resources which in

June 2015 represented 10.7 percent of total liabilities. This category recorded an annual growth

of 20.6 percent, which mainly represents the record profit growth realized by the banking sector.

Within liabilities, the highest annual growth of 86.0 percent was recorded by the category of the

balance from commercial banks. This increase is a result of the financing of some banks with

assets of short maturity of "30 days", mainly borrowed from banks and other financial

institutions abroad. On the other hand, the category of other borrowings (including certificates of

deposit) marked an annual decline of 27.2 percent compared with the growth of 21.4 percent in

June 2014. Also, the category of subordinated debt in June 2015 marked a decrease of 17.4

percent compared with the significant increase of 57.8 percent which was recorded in the same

23.2% 24.2% 25.1% 21.4%

7.3% 7.8% 7.3%8.6%

69.5% 68.0% 67.6% 70.0%

0%

20%

40%

60%

80%

100%


Over 2 years Over 1 year up to 2 years Up tp 1 year

Figure 35. Structure of loans by maturity, in percent

Source: CBK (2015)

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%


Up to 1 years Over 1 year up to 2 years Over 2 years

Figure 36. Growth trend of loans by maturity, annual change

Source: CBK (2015)


| 41

period of the previous year. Reduction of funding activity of the banking sector through various

forms of borrowings (certificates of deposit and subordinated debt) reflects the satisfactory level

of capitalization of the banking sector. The reduction of borrowings from such funding sources

which have higher interest rates contributes to the reduction of the banking sector expenditures.

Table 3. Structure of liabilities of the banking sector

Source: CBK (2015)

Deposits

Total deposits of the banking sector

reached a value of euro 2.57 billion, in

June 2015, marking an annual increase

of 6.3 percent. Compared with the same

period of the previous year, there is

observed a slowdown of deposits growth

(especially household deposits) which

was reflected in the slowdown of the

total activity of the banking sector. Low

interest rates on deposits (especially on

household deposits) which are

characterizing the banking sector as of

the second quarter of 2014 have the

highest contribution to the slowdown

growth of deposit.

Household deposits, which are

considered to be the most stable source of

funding in relation to other financing

channels, continue to dominate the

structure of the banking sector deposits

with a share of 74.0 percent of total

deposits (figure 37). The value of

household deposits an annual increase of

6.0 percent, in June 2015 (an increase of

9.1 percent in June 2014). With an

increase were characterized also

enterprise deposits which comprise up to

20.9 percent of total deposits and

recorded an annual growth of 7.3 percent (an increase of 11.9 percent in June 2014).

In millions of

euro Share (%)

In millions of

euro Share (%)

In millions of

euro Share (%)

In millions of

euro Share (%)

Balance from other

banks 21.3 0.8% 20.2 0.7% 29.9 1.0%55.6

1.7%

Deposits 2,108.5 79.5% 2,201.3 79.0% 2,421.0 79.1% 2,574.6 78.7%

Other borrow ings 26.8 1.0% 14.8 0.5% 17.9 0.6% 13.1 0.4%

Other liabilities 208.9 7.9% 241.3 8.7% 243.4 8.0% 229.3 7.0%

Subordinated debt 31.0 1.2% 36.3 1.3% 57.3 1.9% 47.3 1.4%

Ow n resources 255.8 9.6% 272.9 9.8% 289.9 9.5% 349.7 10.7%

Total liabilities 2,652.3 100% 2,787.0 100% 3,059.5 100% 3,269.6 100%

Përshkrimi


72.1% 74.8% 74.2% 74.0%

23.0% 20.4% 20.8% 20.9%

7.7%

4.4%

10.0%

6.3%

-1%

1%

3%

5%

7%

9%

11%

13%

15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Other deposits Non resident depositsEnterprise deposits Household depositsAnnual change right axis)

Figure 37. Deposits of the bankign sector

Source:CBK (2015)

23.7%17.2% 21.8%

15.5%

14.5%14.4%

13.8%

8.8%

61.7%68.4% 64.4%

75.6%

0%

20%

40%

60%

80%

100%

120%


Other nonfinancial corporations Other public corporat ions

Figure 38. Enterprise deposits, in percent

Source:CBK (2015)


42 |

In the structure of enterprise deposits it is observed an increase in the share of non-financial

corporation deposits (private enterprises) to 75.6 percent from 64.4 percent in June 2014 (figure

38). The expansion was mainly a result of the significant annual increase of 25.9 percent of this

category, which also represent the highest increase in the past seven years. Meanwhile, the

second category by weight, which is

represented by deposits of other

financial corporations, in June 2015,

marked a sharp decline of 23.5 percent

(an increase of 41.6 percent in June

2014). The decline was mainly due to the

reduction of total time deposits of

insurance companies, microfinance

institutions and pension funds. Also the

category of public enterprise deposits

were characterized by a sharp decline of

31.2 percent, thus becoming the main

contributor to the slower growth of

enterprise deposits.

The remainder of total deposits is comprised of non-resident deposits with a share of 3.6 percent

and other deposits (government and other non-governmental organizations) with a share of 1.5

percent. Non-resident deposits whose value reached 92.8 million, in June 2015, recorded an

annual growth of 1.6 percent (figure 39).

Meanwhile, other deposits were characterized by an annual growth of 27.2 percent mainly due to

the deposits growth of the central government and non-governmental organizations in

commercial banks.

Structure of deposits by maturity

The structure of deposits by maturity

has undergone significant changes in the

past two years. While time deposits

previously dominated the structure of

deposits, in June 2015 the main category

of deposits was represented by

transferable deposits with a share of

50.1 percent to total deposits.

Meanwhile, time deposits had a share of

28.4 percent of total deposits,

corresponding with an annual decline of

13.2 percentage points. Saving deposits

remain the third category with a share

of 21.5 percent (18.9 percent in June

2014). These changes were a result of the sharp decline of interest rates on deposits which have

characterized the banking sector since the second quarter of 2014 (figure 40).

Transferable deposits marked the highest annual growth of 34.8 percent, in June 2015. In the

context of transferable deposits, household deposits recorded a more pronounced annual growth

of 39.7 percent, marking the main contribution to the growth of total transferable deposits.

Enterprise transferable deposits were characterized by an annual growth of 26.8 percent and had

a lower contribution to the growth of total transferable deposits.

75.9 76.3

91.4 92.8

0

10

20

30

40

50

60

70

80

90

100


In m

illio

ns o

f euro

Figure 39. Non-resident deposits

Source: CBK (2015)

32.6% 33.9% 39.6%50.1%

51.2% 49.4% 41.6%28.4%

16.2% 16.8% 18.9% 21.5%

0%

20%

40%

60%

80%

100%

120%


Saving deposits Time deposits Transferable deposits

Figure 40. Structure of deposits by maturity

Source:CBK (2015)


| 43

Time deposits, as the main contributor to the slower growth of total deposits, in June 2015

marked a decline of 27.4 percent. This was mainly a result of the sharp decline of 28.7 percent of

total time deposits of households (a decline of 12.0 in June 2014). Enterprises time deposits

marked a decline of 19.6 percent compared with the growth of 14.4 percent as it was in June

2014. Similarly, other time deposits (government deposits and non-governmental organizations

deposits) and non-resident deposits recorded an annual decline of 47.0 percent and 32.4 percent,

respectively, in June 2015.

Despite the reduction of the total value of time deposits, within the structure of this category of

deposits, it is observed an increase in time deposits with longer maturity. In June 2015,

compared with the same period of the previous year, there is an increase of deposits with

medium and long-term maturities, whereas a reduction in short-term deposits (figure 41). In

June 2015, deposits with maturity of “up to 1 year” had a share of 38.1 percent to total time

deposits, representing a decrease of 21.2 percentage points compared with the previous year.

This shift of deposits to longer maturity may have been affected by more favorable interest rates

on long-term deposits against those with short-term deposits. Deposits with maturity “from 1 to 2

years” increased their share to 28.4

percent from 20.0 in June 2014, while

deposits with maturity “over 2 years”

increased their share to 33.4 percent

from 20.7 percent as it was in June 2014.

Saving deposits have continued with a

positive growth trend, where in June

2015 recorded an annual growth rate of

21.0 percent (23.7 percent in June 2014).

Household deposits, which represent 92.6

percent of total saving deposits recorded

an annual increase of 21.4 percent (23.1

percent in June 2014). Non-resident

deposits grew by 36.8 percent in June

2015. In the context of non-resident deposits, unlike the growth trend of saving deposits, time

deposits have decreased as a result of lower interest rates. These lower rates of deposits may

have influenced non-residents to withdraw their deposits from local banks and deposit them at

foreign banks which may have more

favorable interest rates or to invest in

other financial products that bring higher

profits.

6.2.3. Interest rates

Interest rates on loans continued their

declining trend during the first half of

2015, while deposits recorded a slight

increase. The average interest rate on

loans decreased to 7.6 percent in June

2015 from 10.5 percent in June 2014.

Compared with the region countries, the

interest rates on loans have marked a more significant decrease reaching an average rate which

is close to the region interest rate. On the other hand the average interest rate on deposits

increased to 0.8 percent from 0.6 percent in June 2014. Compared with the region countries, the

interest rates on deposits are considerably lower in Kosovo. Despite the slight increase in interest

53.8%

66.5%59.3%

38.1%

28.6%15.1%

20.0%

28.4%

17.7% 18.4% 20.7%

33.4%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Over 2 years From 1 up to 2 years Up to 1 year

Figure 41. Time deposits

Source: CBK (2015)

0%

2%

4%

6%

8%

10%

12%

14%

16%


Interest rates on loans

Interest rates on deposits

Interest rate spread (percentage points)

Figure 42. Average interest rates

Source: CBK (2015)


44 |

rates on deposits, the significant decline in interest rates on loans made the interest rate spread

on loans and deposits, in June 2015, to be reduced to 6.8 pp from 9.9 pp as it was in June 2014

(figure 42).

Interest rate on loans

The downward trend of interest rates on

loans is observed in loans to enterprises

and loans to households as well (figure

43). The average interest rate on loans

to enterprises decreased to 7.4 percent,

in June 2015, from 10.3 percent in the

same period of the previous year. In the

context of enterprise loans, investment

loans were characterized by an average

interest rate of 7.1 percent (10.1 percent

in June 2014), while non-investment

loans had an average interest rate of 8.0

percent (12.6 percent in June 2014)

(figure 44).

As regards to enterprise loans by

maturity, lower interest rates were

recorded in investment loans with

maturity "over 5 to 10 years" (7.1

percent) in June 2015, while a higher

interest rate was recorded in non-

investment loans with the same

maturity “over 5 to 10 years” (11.5

percent).

The reduction of interest rates was

evident for loans intended for all

economic activities. A more pronounced

decline was recorded in the agricultural

sector loans. In June 2015, the average

interest rate on loans to agricultural

sector declined to 7.7 percent from 13.1

percent as it was in June 2014 (figure

45). However, the agricultural sector

continues to have the highest interest

rate on loans, despite the downward

trend followed in the recent years.

The average interest rate on loans to the

industrial sector declined to 7.7 percent

in June 2015 from 11.3 percent, as it

was in June 2014, while the service

sector (including trade) was

characterized with a decline of 7.2 percent from 9.8 percent as it was in the same period of the

previous year. During this period, the highest interest rate of 9.2 percent was recorded in the

industrial sector, specifically in loans with maturities of 'up to 1 year', while the lowest rate of 6.9

percent was recorded in the loans to services sector with a maturity of “over 5 to 10 years”.

7%

9%

10%

12%

13%

15%

16%


Enterprises Households

Source: CBK (2015)

Figure 43. Average interest rates on loans to enterprises and to households

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%


Investing loans Non-investing loans Overdrafts

Source: CBK (2015)

Figure 44. Average interest rates on loans to enterprises, by purpose of use

0%

4%

8%

12%

16%

20%


Agriculture Industry Services

Source: CBK (2015)

Figure 45. Average interest rates on loans to enterprises, by economic activity


| 45

The average interest rate on loans to households decreased to 8.2 percent, in June 2015, from

10.7 percent in June 2014. Within loans to households, the interest rate on consumer loans

declined to 8.4 percent in June 2015 (10.9 percent in June 2014), while the average interest rate

on mortgage loans declined to 7.2


(figure 46). In mortgage loans, a more

significant reduction was recorded in

loans with maturity "over 5 to 10 years '',

thus reaching 6.9 percent, in June 2015,

from 9.2 percent in June 2014.

Interest rates on deposits

The average interest rate on deposits

during the first half of 2015 did not mark

significant changes compared to the

same period of the previous year. In

June 2015, the interest rate on

household deposits reached 0.8 percent

from 0.6 percent in June 2014. Higher

interest rates continue to have

household deposits with a maturity

“over 2 years” (1.7 percent), while lower

interest rates were observed in deposits

with maturity of “over 3 to 6 months”

(0.3 percent). Interest rate on enterprise

deposits, in June 2015, was 1.0 percent,

similar to the same period of the

previous year (figure 47). Within

enterprises, higher interest rates were

in deposits with maturity of “over 1 to 3

months” (1.4 percent) while lower interest rates were observed on deposits with maturity “over 2

years” (0.02 percent ). Moreover, interest rates on transferable deposits and on saving deposits

for both categories (households and enterprises) declined compared with June 2014, but this

decline was more pronounced in

enterprise deposits.

6.3. Banking sector performance

The banking sector was characterized by

good financial performance during the

first half of 2015 where the net profit

realized until June 2015 amounted to

euro 44.9 million (in June 2014 was euro

26.9 million) (figure 48). During this

period, the sector's revenues declined

slightly, primarily as a result of lower

interest income on loans. Whereas, the

expenditures of the sector continued

with a downward trend also in the first half 2015 as a result of the reduced interest and non-

interest expenses. Consequently, the increase in the profit of the banking sector was a result of

the reduced expenses, especially those in deposit interest and expenses for provisions.

3%

5%

7%

9%

11%

13%

15%

17%

19%

21%


Overdrafts Loans with favourable conditions

Consumer loans Mortgage loans

Source: CBK (2015)

Figure 46. Average interest rates on loans to households, by purpose of use

0%

1%

2%

3%

4%

5%

6%



Source: CBK (2015)

Figure 47. Average interest rates on enterprise and household deposits

10.2

15.226.9

44.9

124.2123.6 121.6 119.6

114.0108.4

94.7

74.8

0

20

40

60

80

100

120

140


In m

illions o

f euro

Prof it Revenues Expenditures

Figure 48. Financial performance of the banking

sector

Source: CBK (2015)


46 |

The profit growth, only because of the reduction of expenditures, makes the profitability of the

banking sector more sensitive to the potential growth of expenditures, in the future. More

specifically, a possible increase in the interest rate on deposits or deterioration of the quality of

the loan portfolio could directly result in deterioration of financial performance of the sector.

Therefore, the banking sector should focus on increasing the sustainability of profits by

improving the performance of the revenues and improving the operational efficiency by reducing

the operational expenditures.

Income

The income of the banking sector until

June 2015 reached a value of euro 119.7

million, representing an annual decline

of 1.5 percent. The income structure of

the sector remains similar to the

previous periods being comprised mainly

of interest income (78.8 percent),

followed by non- interest income (20.6

percent), and income from revaluation

(0.6 percent) (figure 49).

Interest income marked a decline of 2.9

percent, giving the main contribution to

the decline of the total income of the

banking sector.

The decline of total interest income,

including interest income on loans,

interest on securities, interest on

placements with other banks and other

income was primarily a result of the

decline of 2.1 percent in revenues from

loans interest, which are the main

determinants of the trend of interest

income given that they comprise 97.2

percent of total interest income (figure

50). The decline in this category

coincides with the decline of interest

rates on loans recorded during this

period (figure 51).

The category of interest income from

securities was the only income category

which was characterized by a significant

increase of 70.6 percent until June 2015.

The increase reflects the orientation of

commercial banks in the country

towards investments in securities of the

Kosovo’s Government which during the

year had higher interest rates compared

to the previous year and compared with

the foreign government securities.

Significant impact on the growth of interest income from securities had also the placement in the

81.4% 80.2% 79.9% 78.8%

18.6% 19.1% 19.9% 20.6%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Revaluat ion income Non-interest income Interest income

Figure 49. Banking sector income, in percent

Source: CBK (2015)

95.9%

97.1%96.4%

97.2%

1.1%

0.7%

0.8%

0.4%

2.8% 1.2%

1.2%

2.2%

0.3%0.9%

1.6%

0.3%

93%

94%

95%

96%

97%

98%

99%

100%


Loans Bank placement Securities Other

Figure 50. Banking sector interest income, in percent

Source: CBK (2015)

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

Mar

Jun

Se

p

Dec

Mar

Jun

Se

p

Dec

Mar

Jun

Se

p

Dec

Mar

Jun

2012 2013 2014 2015

Loans Securities Fees and commissions

Figure 51. Banking sector income, annual change

Source: CBK (2015)


| 47

domestic market of government bonds with maturities of three years, which have higher interest

rates.

The second category by weight in the structure of total revenues is the non-interest income which

until June 2015 recorded a growth of 1.8 percent. The increase was primarily a result of

increased other operating income, although this category accounted for only 9.0 percent of total

non-interest income while income from fees and commissions declined by 0.1 percent. Other

operating income, which include net income from foreign exchange and income from rent and

repossessed assets, until June 2015 recorded a significant annual growth of 25.1 percent.

The category of income from revaluation was characterized by an increase of euro 0.7 million

from euro 0.2 million in June 2014 which also resulted in increased share of the category to total

income of the sector. The increase was generally a result of realization of income from the sale of

tradable assets (financial instruments) with the most favorable price/revalued, but the high

growth mainly reflects the effect of the low base considering the low share of income from

revaluation in the sector.

Expenditures

Total expenditures of the banking sector,

until June 2015, reached a value of euro

74.8 million, marking an annual decline

of 21.0 percent. Expenditures structure

is dominated by the category of general

administrative expenditures which until

June 2015 expanded its share to 66.1

percent (51.3 percent in June 2014).

Increased share of general and

administrative expenditures in the

framework of the general expenditures

was mainly due to the reduction of

interest expenditures and non-interest

expenditures. Interest expenditures

represent the second largest category

with a share of 16.2 percent of total

expenditures, followed by the category of

non-interest expenditures with a share of

11.5 percent. Both these categories were

characterized by a significant narrowing

of share in the structure of total

expenditures over the last year (figure

52).

General and administrative expenditures

recorded a growth of 1.9 percent until

June 2015, compared with the decline of

1.0 percent that was recorded in June

2014 (figure 53). Within the general and

administrative expenditures, general expenditures were characterized by a decline of 5.5 percent,

implying that the increase in the category of general and administrative expenditures mainly

reflects the increase of personnel expenditures by 0.5 percent and the increase of other

expenditures from non-interest with 16.2 percent.

26.7% 29.4% 27.2%16.2%

27.6% 23.5%18.3%

11.5%

43.6% 45.2%51.3%

66.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Interest expenditures Non-interest expenditures

General and administrative expenditures Rvaluation losses

Fees provisions

Figure 52. Banking sector expenditures, in percent

Source: CBK (2015)

11.1%4.8%

-19.2%

-53.0%

36.2%

-19.0%

-32.0% -50.6%

8.3%

-1.4%

-1.0%

1.9%

-60%

-40%

-20%

0%

20%

40%

60%

80%


Interest expenditures

Non-interest expenditures

General and administrative expenditures

Figure 53. Banking sector expenditures, annual change

Source: CBK (2015)


48 |

Interest expenditures, until June 2015,

marked an annual decline of 53.0

percent (a decline of 19.2 percent until

June 2014), thus becoming the main

contributor to the reduction of total

sector expenditures. The deepening of

the decline is mainly attributed to the

reduction of interest expenditures on

deposits as the main component of this

category (with a share of 75.3 percent).

Interest expenditures on deposits

marked an annual decline of 58.8

percent, mainly as a result of low

interest rates on deposits that are

characterizing the banking sector since

the second quarter of 2014 (figure 54).

The category of non-interest

expenditures was characterized by an

annual decline of 50.6 percent in June

2015. The decrease is mainly

attributed to the annual decline of 73.7

percent of expenditures for loan loss of

provisions. The reduction of

expenditures for loan loss provisions

during this period was due to the

improved quality of the loan portfolio,

namely the reduction of the value of

non-performing loans compared to the

previous year (figure 55). Despite the reduction of provision expenditures, the coverage rate of

non-performing loans by provisions remains satisfactory standing at 119.3 percent in June 2015

(116.4 percent in June 2014).

Profitability and efficiency

The significant increase of the profit

until June 2015 resulted in a

considerable improvement of the

profitability indicators of the banking

sector compared with the previous year.

Return on Average Assets (ROAA)

reached 2.8 percent from 2.0 percent in

2014. Return on Average Equity (ROAE)

also marked an increase, reaching 25.9

percent from 20.3 percent in 2014 (figure

56).

The significant reduction of expenditures, despite the income decline, it has had an impact on the

improvement of the overall efficiency indicator, which is expressed through expenditures to total

income ratio. In June 2015, this indicator decreased to 62.5 percent from 77.9 percent in the

previous year (figure 57).

-90%

-60%

-30%

0%

30%

60%

Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun

2012 2013 2014 2015

Interesi në depozita Tarifat dhe komisionimet Provizionet për humbjet e kredive

Figure 54. Interest and non-interest expenditures by categories, annual change

Source: CBK (2015)

22.7%

18.1%

13.1%

-4.0%

20.7%23.3%

9.2%

-6.2%

-10%

0%

10%

20%

30%


Loan loss provisions Non-performing loans

Figure 55. NPL and loan loss provisions, annual change

Source: CBK (2015)

0.7% 0.9%2.0%

2.8%

7.1% 9.4%

20.3%

25.9%

0%

5%

10%

15%

20%

25%

30%

0

10

20

30

40

50

60

2012 2013 2014 2015*

In m

illions o

f euro

Prof it ROAA (right axis) ROAE (right axis)

Figure 56. Profitability indicators of the banking sector

*2015 - annualized

Source: CBK (2015)


| 49

The slight efficiency improvement of the

banking sector was observed in the

operational expenditures to total assets

ratio, which in June 2015 decreased by

0.1 percentage points compared with the

same period of the previous year (table

4). On the other hand, net interest

margin10 increased by 0.2 percentage

points, reaching 3.0 percent in June

2015. The growth of this indicator

reflects the faster growth of net interest

income (as a result of lower interest

expenditures on deposits) compared with

growth of interest-bearing assets.

Table 4. Key efficency indicators of the banking sector, in percent

Source: CBK (2015)

Table 5 shows some indicators of the banking sector capacity, whose developments in the recent

years indicate an increase in utilizing the capacities of the sector. This is expressed through

indicators that show the ratio of the average value of assets managed by an employee and the

ratio of the average number of loans issued by an employee. The data for both indicators until

June 2015 suggest a capacity utilization increase by the Kosovo’s banking sector. The

improvement of these two indicators was influenced by higher growth of the banking sector

activity in the first half of 2015 in addition to the slight increase in the number of employees in

the banking sector, which in June 2015 amounted to 3.531 from 3.488 in the same period of the

previous year. Another indicator of banking capacity, expressed as the ratio of the realized profit

per employee, has improved significantly as well. This came as a result of higher realized profit

until June 2015 along with an increase in the number of employees. Whereas the ratio of total

personnel expenditures and the number of employees in June 2015 decreased slightly compared

to the same period of the last year, which represents a better management of the cost of the labor

factor by banks in Kosovo, considering the slower increase of personnel expenditures compared

with the increasing number of employees in the reporting period.

Table 5. Indicators of the banking sector capacity

Source: CBK (2015)

10

The net interest margin represents the ratio between net interest income and the average profitable assets.

91.8%87.7%

77.9%

62.5%

40%

50%

60%

70%

80%

90%

100%


Figure 57. Expenditures to income ratio of the banking sector

Source: CBK (2015)

Operational expenditures/total assets 1.9% 1.8% 1.6% 1.5%

Net interest margine 3.2% 2.9% 2.8% 3.0%



Assets/no. of employees (in thousands of euro) 714.3 766.1 877.2 926.0

Number of loans/no. of employees 113.4 115.3 130.9 138.4

Profit/no. of employees (in thousand of euro) 2.8 4.2 7.7 12.7

Personnel expenditures/no. of employees 5.6 5.8 6.0 5.9


50 |

6.4 Banking sector risks

Risks to which the Kosovo’s banking

sector is exposed remained at a low level

during the first half of 2015.

Furthermore, exposure to credit risk and

solvency has decreased due to the

decline of non-performing loans and

accelerated growth of total lending and

the increase of the banking capital as a

result of the profit growth. Accelerated

lending growth has lowered the liquidity

indicators but it still remains at a

satisfactory level. Figure 58 which

presents the key indicators of the

banking risks and the performance of

the sector, shows that all risk indicators have marked improvements. This overall improvement

of important developments is reflected in a significant increase of the banking sector performance

compared to the previous year. An improvement is observed also in the external macroeconomic

environment, where the euro area was characterized by a higher growth rate of 1.5 percent in

2015 unlike the increase of 0.9 percent in 2014. Regarding the domestic macroeconomic

environment, also the Kosovo’s economy is forecasted to mark a higher growth rate (3.5 percent)

in 2015 compared with the growth of 2.7 percent in 2014.11

The capital of the banking sector increased during the first half of 2015 as a result of increased

net income, resulting in an increased quality of the capital as well as the sector's capitalization

indicators. The strengthened capital position suggests higher sustainability of the banking sector

and satisfactory ability for coping with potential losses. Credit risk has decreased during the first

half of 2015, resulting in a lower rate of non-performing loans to total loans and declining trend

in concentration of the credit risk, with which was characterized the banking sector during the

past three years. Also, the coverage of non-performing loans by loan loss provisions has

increased, indicating a satisfactory ability of the sector to cope with potential losses. The liquidity

position of the banking system remains at a satisfactory level, although characterized by

accelerated growth of loans and slowdown growth of deposits compared to the previous year. The

slowdown growth of deposits compared with the previous years and the orientation towards

shorter maturities and the accelerated lending growth have had an impact on the slight decline

of liquid assets to short term liabilities indicator. However, the latter remains well above the

minimum level as defined by the regulatory requirements. Kosovo’s banking sector continues to

have low exposure to market risk, given the fact that almost all loans and deposits continue to

have fixed interest rates and the balance sheet of the banking sector almost completely is

denominated in euro currency and therefore has low exposure to exchange rate risk.

6.4.1 Liquidity risk

The banking sector’s exposure to liquidity risk remains low despite the decline of liquid assets to

short-term liabilities during the first half of 2015. Deposits which constitute the main source of

financing of the banking activity marked an increase but at a slower pace compared with the

same period of the previous year. Also, deposits showed an orientation to shorter maturity (1-7

11

The annual growth rate of GDP of Kosovo for 2015 is an estimate of the CBK, while the annual growth rate of euro area GDP is obtained from IMF statistics.

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Economic growth

in Kosovo

Economic growth

in euro area

Net interest

margine

ROAE

CAR

NPL

2014 2015

Figure 58. The map of the banking sector risks, in percent)

Source: CBK (2015)


| 51

days), partly reflecting the increase in

deposits sensitivity to interest rate

decline. The orientation of deposit

towards shorter maturities has increased

the short-term liabilities. The loans to

deposits ratio marked a slight decrease

to 77.9 percent in June 2015 from 78.1

percent in June 2014 as a result of

higher annual growth of deposits

compared to the lending growth (figure

59).

Increased lending activity, in the first

half of 2015, and investment orientation

towards longer maturities in financial

markets has slowed down the growth rate of short-term liquid assets. In June 2015, short-term

assets recorded a growth of 4.5 percent, compared with the annual growth of 25.9 percent in June

2014. On the other hand, short-term liabilities recorded a higher annual growth of 9.1 percent as

a result of the orientation of deposit

towards shorter maturity.

Consequently, the broad liquid assets to

short term liabilities ratio

comprehensive decreased to 41.9 percent

in June 2015 compared with 43.7 percent

in June 2014, but continues to remain

well above the minimum level of 25

percent as required by the Central Bank

(figure 60).

In the context of liquid assets, a more

significant increase was marked by

government tradeable bonds and

tradable treasury bills of the Kosovo’s

Government, while a higher decline was marked by foreign securities of short maturities,

indicating an orientation towards investments in securities with longer-term maturities. On the

liabilities side, the expansion of transferable deposits, liabilities to the parent bank and short-

term borrowings have had an impact to

the growth of short-term liabilities and

have a faster growth rate than liquid

assets growth.

Also, required reserves of the banking

sector continued to remain higher than

the regulatory requirements. In June

2015, the required reserve stood at euro

234.1 million, while the total value of

reserves held by banks exceeded the

required reserve for 47.9 percent (figure

61). Holding reserves at the high level

can be considered as positive for the

sector sustainability because the sector

reduces exposure to developments with potential risk to the liquidity position. However, this

68%

70%

72%

74%

76%

78%

80%

82%

84%

86%

0

500

1,000

1,500

2,000

2,500

3,000

Mar jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun

2012 2013 2014 2015

Loans Deposits Loans to deposits ratio (right axis)

Figure 59. Loans and deposits of the banking sector, in millions of euro

Source: CBK (2015)

38.5%43.7%

41.9%

0%

10%

20%

30%

40%

50%

0

500

1000

1500

2000

2500

3000

June 2013 June 2014 June 2015

Broad liquid assets

Short-term liabilities

Broad liquid assets ratio to short term liabilit ies

Source: CBK (2015)

Figure 60. Broad liquid assets ratio to short term liabilities

0

50

100

150

200

250

300

350

400

450

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 TM22015

Required reserves Balance with the CBK

Cash Total reserves

Source: CBK (2015)

Figure 61. Banking sector reserves, in millions ofeuro


52 |

represents an opportune cost for banks that do not collect interest on excessive reserves, which

can be transmitted to a cost increase of the banking services.

During the first half of 2015, the

Kosovo’s banking sector was

characterized by an increase of the

“structural liquidity risk“, as reflected by

an increase in the maturity mismatch of

assets and liabilities of the same

maturity range (figure 62). 12 Liquidity

gap has increased for almost all the

categories. A more significant growth

was recorded in the category of “1-7

days”, where the gap has doubled to euro

-1.069 from euro -573.9 million in June

2014. This made the negative for the

cumulative period of ‘up to 3 months’ to

increase to euro -936.8 million from euro -558 million in June 2014. The considerable growth of

the negative gap for the period '1-7 days' had an impact on the growth of the negative gap for the

cumulative period “of up to 1 year”, but its negative effect is mitigated to some extent by being

moved to a positive gap of the category “31-90 days” and from the growth of the positive gap for

the categories “91-180 days” and “181 to 365 days”.

In June 2015, assets of all maturity categories marked a growth except assets with a maturity of

'1-7 days' which recorded a decline of euro 66.8 million. Within this category, the highest decline

was recorded in securities and tradable assets. While, the category of assets with maturity of

'over 1 year' recorded the highest growth of euro 175.2 million, which is a result of the shift of

investments in securities into longer maturities and the loans growth with a maturity 'over 5

years.

On the liabilities side, the highest annual growth was recorded for the category with maturity of

"1-7 days", which increased the value for euro 428.8 million, mainly as a result of the growth of

transferable deposits, liabilities to the parent bank and short-term borrowings. Whereas,

liabilities with maturity of 'more than 1 year" marked an increase of euro 40.7 million, which

resulted mainly from the increase in equity.

The increase of the negative gap mainly for the category with shorter maturity of '1-7 days' was

influenced by developments in the main items of the balance sheet. Lending growth was reflected

in the reduction of assets with short term maturity and an increase in those with maturities

longer than one year. On the liabilities side, the growth of transferable deposits, liabilities to

parent banks and short-term borrowings led to a growth of liabilities for the category with a

maturity of '1-7 days', while a more significant decline of deposits with interest for all other

categories of maturity shows a shift of deposits with shorter maturities. This development

coincides with the decline of interest rates on deposits, which reduced the depositors’ willingness

for depositing.

These developments in the structure of deposits signify the need for deposits growth with longer

term of maturity, because such development would reduce the risk of liquidity and will also

create higher opportunities for the growth of long-term lending, which represents a development

highly needed to improve the conditions for financing investments.

12

The negative gap means that assets for the determined interval of maturity exceed the liabilities and vice versa.

-1100

-900

-700

-500

-300

-100

100

300

500

1-7 ditë 8 - 30 ditë 31 - 90 ditë 91 - 180 ditë 181 - 365ditë

Më shumë se1 vit


Source: CBK (2015)

Figure 62. Liquidity gap, in millions of euro


| 53

External funding, which traditionally was used at considerably low level by the Kosovo’s banking

sector, during the period until June 2015 recorded a significant increase as a result of increased

liabilities to parent banks. Given that some of the parent banks of the banks operating in Kosovo

are part of the euro area, the increase in funding in the foreign market may be affected by the

program of quantitative easing of the ECB, a policy that is reflected in the growth of the bank

liquidity in the foreign market and

easing the lending conditions in the

foreign market.

6.4.2. Credit risk

One of the main risks to which the

banking sector in Kosovo is exposed is

the credit risk. In June 2015, the non-

performing loans (NPL) to total loans

ratio declined to 7.2 percent from 8.2

percent in June 2014 (figure 63). The

decline of the NPL rate compared with

the previous year is attributed to the

improvement of the quality of loans

portfolio (which is reflected by the

annual decline in the value of NPL) and

faster growth in the stock of loans

during the first half of 2015 (figure 64).

Non-performing loans in June 2014

recorded an annual decline of euro 9.6

million representing a significant

improvement compared with the annual

growth of euro 12.9 million recorded in

June 2014 (26.4 million June 2013).

Also, the stock of total loans in the past

two years marked a significant annual

increase reaching euro 115.5 million in

June 2015 compared to previous years

(64.2 million in June 2014 and 49.5

million in June 2013). To the credit

quality improvement may have contributed also the implementation of stricter standards of most

banks in the past as regards to lending. Also, licensing the bailiffs may have had a positive effect

in the decline of the NPL value considering its impact on facilitating the implementation of credit

contracts. Compared with the region countries, Kosovo has the lowest level of non-performing

loans compared to average in the region which in June 2015 stood at 17.2 percent.

The downward trend of NPL rate was more significant in the first half of 2015 compared with the

increasing trend during the longest period of the second half of 2014. During this one-year period,

the higher level of NPL was in October 2014 (8.7 percent) and in January 2015 (8.6 percent),

while the lowest rates were observed in May and June 2015 when the value of NPL was 7.6

percent and 7.2 percent, respectively.

6.5%

7.8%8.2%

7.2%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%


Figure 63. NPL to total loans ratio, in percent

Source: CBK (2015)

9.3%

2.8% 3.5%

6.1%

20.7%

23.3%

9.2%

-6.2%

-10%

-5%

0%

5%

10%

15%

20%

25%


Total loans NPL

Figure 64. Annual growth of total loans and NPL, annual change

Source: CBK (2015)


54 |

The banking sector has higher credit

exposure on loans to enterprises, within

which energy and manufacturing loans

have higher NPL rates (figure 65).

Moreover the loan portfolio for the

energy sector recorded a growth of NPL

rate in the last year, reaching 19.1

percent in June 2015 (14.8 percent in

June 2014). While, the loans portfolio

for the manufacturing sector was

characterized by an improved quality,

where the NPL rate declined to 10.6

percent (12.2 percent in June 2014). The

trade sector, which dominates the

structure of loans to enterprises,

recorded a lower NPL rate of 9.9 percent

compared with the previous year (11.5

percent in June 2014). Improved loan

portfolio, namely a decline of NPL rate,

was marked also by loans of the

agricultural sector, tourism and hotel

services, and real estate sector. The

NPL rate for the agricultural sector

declined to 7.2 percent (9.7 percent in

June 2014), for the sector of tourism and

hotel services the NPL rate declined to

7.4 percent (9.3 percent in June 2014),

and for real estate sector NPL rate

decreased to 9.7 percent (11.5 percent in

June 2014). Household sector continues

to remain with lower exposure to credit

risk, with an NPL rate of 2.6 percent

(2.8 percent in June 2014).

The reduction of exposure to credit risk

compared with the previous period was

shown also through the migration of

loans from categories with lower quality

to the category of loans without delay

(figure 66). Loans categorized as

“standard” increased their share for

2.8pp, while on the other hand, loans

categorized as “watch” and

“substandard” decreased their share for 0.6pp and 1.2pp, respectively. Similarly, two other

constituent categories of non-performing loans marked a reduction in their share for 0.8pp

('doubtful') and for 0.1pp ('loss').

0%

5%

10%

15%

20%

25%


Figure 65. NPL by economic sectors

Source: CBK (2015)

88.5%86.8%

84.8%87.6%

2.0%2.2%

3.0%

2.3%

3.0%3.2%

4.1%2.9%

2.1%2.5% 2.0% 1.2%

4.3% 5.2% 6.2% 6.0%

75%

80%

85%

90%

95%

100%


Standard Watch Substandard Doubtful Loss

Figure 66. Structure of loans by classification

Source: CBK (2015)

11.5% 13.2% 15.2%12.4%

9.5%11.0%

12.3%

10.1%

6.5%

7.8%

8.2%

7.2%

0%

5%

10%

15%

20%

25%

30%

35%

40%


Delayed Classified Non-performing

Figure 67. Loans movements by credit classification, in percent

Source: CBK (2015)


| 55

The reduction of exposure to credit risk can be observed also in figure 6713 which reflects changes

in the three main categories of loans with problems. Compared with the previous period, a more

significant decline was observed in loans with delays, whose ratio to total loans was 12.4 percent

(15.2 percent in June 2014). Meanwhile, the ratio of classified loans (which represent loans with

a delay of over 61 days to total loans) in June 2015 decreased to 10.1 percent from 12.3 percent in

the previous year.

In addition to improving the overall loan portfolio, the level of provisioning of the sector has

increased. The coverage ratio of non-

performing loans by provisions

increased to 119.3 percent from 116.4

percent in June 2014 (figure 68). Also,

the more significant decline of loans in

the category of 'substandard' has

influenced the coverage ratio of

provisions for loans classified as

('substandard', 'delayed' and 'loss') to

reach a more pronounced growth of 85.5

percent in June 2015 from 77.8 percent

in June 2014.

Lending recovery can have a positive

impact on the expansion of the activity

of enterprises and can be reflected in the improvement of their capacity to return the existing

loans and the new ones. The easing of credit standards by banks in the recent period as well as

offering better conditions for obtaining loans (more favorable interest rates) can apply for loans

also the customers who have had lower classification in terms of their financial surveys.

Therefore, it is required that further expansion of lending to be done in accordance with the

principles of sound lending, aiming at avoiding possible deterioration of credit quality.

Concentration of credit risk

A very important aspect of credit risk is

the degree of concentration of credit

exposures. Concentration of credit risk

in the banking sector declined in the

first half of 2015 compared with the

same period of the previous year.

Exposure to credit risk, which is

measured as the ratio of total large

exposures to Tier 1 capital, decreased to

81.2 percent from 124.0 percent in June

2014 (figure 69). This decrease is largely

attributed to the Tier 1 capital growth of

30.2 percent in June 2015, as a result of

the high growth of profit during this period. The value of large exposures in June 2015 was euro

277.4 million, representing an annual decline of 14.7 percent. To the decline of exposure to credit

risk during this period, a significant impact was marked by three largest banks, in which the

13

According to CBK Regulations on credit risk management, the abovementioned credit ratings are grouped into three categories of credit risk exposure: overdue loans,

which include watch, sub-standard, doubtful and loss categories; Classified loans which include categories that include sub-standard, doubtful and loss loans, and

nonperforming loans that include doubtful and lost loans.

117.3%

113.2%

116.4%

119.3%

110%

112%

114%

116%

118%

120%

122%

124%

126%

128%

130%

0

20

40

60

80

100

120

140

160

180


NPL (in millions of euro) Provisions/NPL (right axis)

Figure 68. NPL and provisions

Source: CBK (2015)

72.0%

91.0%

124.0%

81.2%

0%

20%

40%

60%

80%

100%

120%

140%

0

50

100

150

200

250

300

350

400


In m

illio

ns o

f eu

ro

Overall large exposures

Total Tier 1 capital

Large exposures to total Tier 1 capital (right axis)

Figure 69. Concentration of credit risk

Source: CBK (2015)


56 |

ratio of large exposures to Tier 1 capital decreased to 69.7 percent (118.3 percent in June 2014).

In other banks, in June 2015, this ratio was 106.2 percent (138.2 percent in June 2014).

Besides the decline in value, a decrease was observed also in the number of large credit

exposures. In June 2015, the number of large exposures decreased to 51 from 64 as it was in June

2014. However, the average value of large exposures was higher than in the previous year,

standing at euro 5.4 million in June 2015 (euro 5.1 million in June 2014). This suggests a higher

concentration of credit risk in a small number of credit exposures.

The downward trend of credit exposure during this period compared to last year, is demonstrated

also by reducing the amount of three largest exposures to total exposures, which decreased by 2.5

percentage points, standing at 58.2 percent in June 2015.

6.4.3. Solvency risk

Kosovo's banking sector continues to

further strengthen its capitalization

position. In June 2015, the Capital

Adequacy Ratio (CAR), which represents

the total regulatory capital to risk

weighted assets ratio, amounted to 19.0

percent compared with 17.4 percent in

the previous year (figure 70).14

The increase of capitalization indicator

was a result of higher annual growth

rate of the regulatory capital of 20.2

percent, compared with the annual

growth of 10.5 percent of risk weighted

assets (RWA) (figure 71). Also, the rate

of Tier 1 capital to risk weighted assets

improved to 15.9 percent from 13.5

percent in June 2014.

The capitalization of the banking sector

in the country was also above the

average of the region countries, where

the average of the capital adequacy ratio

in the region was 17.5 percent, in June

2015. Another indicator for assessing the

level of capitalization is the leverage

ratio, which in June 2015 reached to

11.7 percent from 10.1 percent in June of

the previous year. The increase resulted mainly due to the major growth of total equity (annual

growth of 24.1 percent in June 2015) compared to the growth of total assets (annual growth of 6.9

percent). Increased equity was primarily a result of increased profit realized by banks, while the

lower increase of the total assets of the banking sector was mainly a result of the slowdown

growth of deposits in the banking sector. The current leverage ratio exceeds the regulatory

requirement of the minimum rate of 7 percent. 15 However, the current level is below the level of

14

According to CBK regulation on Capital Adequacy, banks are required to maintain at least 12 percent of total regulatory capital to RWA ratio and at least 8 percent of

Tier 1 capital to RWA ratio. 15

CBK regulation on Capital Adequacy.

17.2% 16.5%17.4% 19.0%

0%

5%

10%

15%

20%


CAR

Tier 1 capital/Risk weighted assets

Equity to assets ratio

Figure 70. Banking sector capitalisation

Source: CBK (2015)

7.1%

-4.1%

16.8% 20.2%

7.0%

-0.2%

10.7% 10.5%

-10%

-5%

0%

5%

10%

15%

20%

25%

100

400

700

1000

1300

1600

1900

2200

June 2012 June 2013 June2014 June 2015

Regulatory capital

RWA

Annual change of regulatory capital growth (right axis)

Annual change of RWA growth (right axis)

Figure 71. Regulatory capital and RWA

Source: CBK (2015)


| 57

the region, which in June 2015, on average, had the leverage ratio of approximately 13.9

percent.16

Regulatory capital

Regulatory capital of the banking sector, in June 2015, amounted to euro 408.9 million, thus

exceeding the minimum regulatory capital requirement for euro 150.2 million. The quality of

capital, expressed by the share of Tier 1 capital to total capital, has improved compared to the

previous years, when the quality of capital had decreased as a result of increased funding of

regulatory capital from sources of Tier 2 capital (figure 72).

The value of Tier 1 capital amounted to

euro 341.7 million in June 2015,

representing an annual increase of 30.2

percent. The share of Tier 1 capital to

total regulatory capital reached 83.6


June 2014).

The value of Tier 1 capital amounted to

euro 341.7 million in June 2015,


percent. The share of Tier 1 capital to

total regulatory capital reached 83.6


June 2014).

The significant profit growth of the sector, in 2014, which continued also in the first half of 2015,

was reflected in a considerable increase of the Tier 1 capital. While negative impact on the

amount of regulatory capital had the distribution of the dividend by banks, which had an impact

through the reduction of retained profit. The good financial performance in the recent years is an

indication that the banking sector has the potential to further increase the quality of capital by

increasing the level of capital, which would be reflected also in the increase of the leverage ratio.

The structure of Tier 1 capital remains

similar to previous periods.

Shareholders capital continues to be the

dominant category of the Tier 1 capital,

but with a slight decline of its share

(78.1 percent compared to 86.2 percent

in June 2014) as a result of increased

share of the second category by size

which consists from the profit (retained

from the previous year and accumulated

until June 2015) (figure 73).

Tier 2 capital, on the other hand,

recorded an annual decline of 13.8

percent, reaching euro 67.2 million, in

June 2015. This decrease was due to the reduction of subordinated debt for 20.6 percent. In June

2015, the value of subordinated debt was euro 45.5 million and accounted for 67.3 percent of the

16

Leverage average ratio for the region (Western Balkan countries such as: Bosnia and Herzegovina, Montenegro, Macedonia, Albania and Serbia) calculated by the

CBK from the balance sheets of the appropriate countries, reported at the appropriate Central Banks.

83.5% 81.0% 77.1%83.6%

16.5% 19.0% 22.9%16.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Tier 1 capital Tier 2 capital

Figure 72. Structure of regulatory capital, in percent

Source: CBK (2015)

218.3 226.2266.9

53.763.8

92.8

4.84.7

5.7

0

100

200

300

400


Investments in equities and deferred taxLending to bank related personsintangible assets and good willRetained profit, current year to date, reserve assetsCapital (shareholders capital, surplus, preferred shares)

Figure 73. Structure of Tier 1 capital, in millions of euro

Source: CBK (2015)


58 |

Tier 2 capital (figure 74). The remainder

of 32.2 percent of the Tier 2 capital

consisted of general loan provisions.17

Unlike the previous years when,

although in very small percentages,

banks used debt instruments compulsory

convertible into shares for capital

completion, which in the past four years

these instruments were not applicable.

Risk-weighted assets

The value of risk weighted assets (RWA)

in June 2015 reached euro 2.16 billion

from euro 1.95 billion as it was in the

previous year. The increase of RWAs was

mainly a result of the growth of risk-

weighted assets with 100 percent risk

weight, which include loans and off-

balance items. The value of these assets

in June 2015 reached euro 1.70 billion

(1.41 billion in June 2014) increasing

their share to total RWA to 78.9 percent

(72.5 percent in June 2014) (figure 75).

The increase of this RWA category was

influenced by the accelerated lending

activity, whose major parts of assets are

within the risk weight of 100 percent.

On the other hand, risk weighted assets

from 75 percent have decreased

significantly, reducing the effect of the

total increased RWA of the significant

increase of assets with risk weight of 100

percent. These assets, which consist of

loans covered by collateral of the first

class18 declined to euro 208.2 million

from euro 295.3 million in June 2014,

while their share to total RWA declined

to 9.7 percent from 15.1 percent in the

previous year.

The category of assets with the highest

weight of risk (150 percent), which

include direct requirements with

maturities of '1 year or less" and which require a prior approval from the CBK, but which have

credit rating with high risk of non-payment (below B- by Fitch assessments) marked an increase,

but their share to total RWA is low (0.1 percent). Their value in June 2015 amounted to euro 1.9

million from euro 1.2 million in the previous year.

17

Value of provisions allocated by banks on loans with standard and watch rating is calculated as shear of Tier 2 capital, limited to 1.25% of risk- weighted assets. 18

Specifically, the assets weighted by 75 percentage points of risk include loans or parts thereof covered by collateral of the first order in the form of residential

mortgages and loans for the builders to finance immovable property construction, where the financed property has been sold or rented out.

19.2 19.0 20.6 21.6

31.036.3

57.345.5

0

10

20

30

40

50

60

70

80

90


General provision for loans (Standard and Watch) Subordinated debt

Figure 74. Structure of Tier 2 capital, in millions of euro

Source: CBK (2015)

9.9% 9.5% 8.9%15.7%

16.3% 15.1%9.7%

78.7% 78.7%72.5%

78.9%

0%

20%

40%

60%

80%

100%


Weight 150 % Weight 20% Operational risk

Weight 50 % Weight 75% Weight 100 %

Figure 75. Structure of RWA by risk weight

Source: CBK (2015)

61.8%

59.4%60.6%

62.2%

61.8% 59.4%

54.8%

56.7%

50%

52%

54%

56%

58%

60%

62%

64%


RWA to total assets ratio

RWA to toal assets rat io (excluding operational risk assets)

Figure 76. RWA to total sector assets ratio

Source: CBK (2015)


| 59

Other categories of RWA did not experience any significant change. While, the total assets of the

sector19, the value of which do not carry risk, or which have a risk weight of 0%, declined to 58.1

percent of the RWA value from 59.7 percent, in June 2014. This can imply also an increase in

risk-taking level by the banking sector. This can be supported also by the fact that the RWA to

total assets ratio increased during the past two years (figure 76). In June 2015, the share of risk-

bearing assets to total assets of the banking sector reached 62.2 percent from 60.6 percent in

June 2014.

6.4.4 Market risk

The banking sector’s exposure to market risk, which implies the risk of exchange rate movements

and the movements in the interest rates remains at a low level. Net aggregated open position in

foreign currency to Tier 1 capital has decreased significantly, thus further decreasing the low

sensitivity of the sector to changes in exchange rates. Loans in foreign currency recorded an

annual growth of 5.5 percent, but at the same time having very low share to total loan portfolio

(0.3 percent in June 2015), do not pose risk to the banking sector.

Exposure to interest rate risk continues to remain low. Main items of the balance sheet of the

banking sector, namely loans and deposits, mainly have fixed interest rates and are not affected

by movements in interest rates in the short term. However, there is the risk of interest rates in

terms of refinancing and reinvestment of funds where possible changes in interest rates are

reflected faster on the sector liabilities side due to shorter maturity of liabilities which bear

interest in relation to assets. Because the gap of assets and liabilities sensitive to interest rates

has not very high share to total assets, thus changes in interest rates may have little impact on

the sustainability of the sector.

Exchange rate risk

The net aggregated open position in

foreign currency decreased in the first

half of 2015. This resulted from the

decline of assets in foreign currency to

euro 127.7 million (equivalent value)

from 145.8 million in June 2014. A

similar trend resulted on the foreign

currency liabilities, which declined to

euro 128.7 million equivalent value in

June 2015, from 146.9 million in June

2014 making the net open position to

slightly narrow to euro -1 million

equivalent value (euro -1.1 million in the

equivalent value in June 2014). On the

other hand, the net aggregate opened position for all currencies20 declined to euro 2.8 million

equivalent value in June 2015 from euro 6.9 million equivalent value in the same period of the

previous year. This decline, together with the increased level of the Tier 1 capital of the banking

sector during this period, made the aggregate net open position of foreign currency to Tier 1

capital ratio decline to 0.8 percent compared with 2.6 percent in June 2014 (figure 77).

19

Off-balance assets are included in the calculation due to their involvement to the calculation of total RWA.

20 Aggregated net open position means the amount of long and short positions in all currencies. For example, a short net posi tion (-) in dollars equivalent to 1 million

euro, and a net long position (+) in Swiss francs worth of 1 million euro equivalent resulting in aggregated net position of euro 2 million, whereas net open position would

be 0.

-3.5%

-2.5%

-1.5%

-0.5%

0.5%

1.5%

2.5%

3.5%

June 2014 June 2015

US$ UK£ CHF Other Opened net aggregated posit ions/Tier 1 capital

Figure 77. Opened positions in foreign currencies against Tier 1 capital

Source: CBK (2015)


60 |

In terms of currency disaggregation, higher net open position to Tier 1 capital reached the Swiss

franc, unlike the same period of the previous year when higher position was marked by the US

dollar. In June 2015, this ratio of the Swiss franc changed the direction to -0.23% (from 0.38% in

June 2014), while the US dollar ratio declined to -0.02% (from -0.65% in June 2014). The ratio of

net open positions for individual currencies against the Tier 1 capital remains well below the

maximum of 15 percent as allowed by the CBK. Based on these data, it can be suggested that the

banking sector remains well protected from movements in the exchange rates.

Lending in foreign currency from the banking sector continues to be quite low, however in June

2015, increased to euro 6.3 million from euro 5.9 million equivalent value, in June 2014. The

equivalent value However, their ratio to total loans portfolio was 0.31 percent which is almost the

same as in June of the previous year, as along with the total growth of loans in foreign currency,

there was marked an increase also in the total stock of loans.

On the other hand, deposits in foreign currency have higher share to total deposits, however in

June 2015, it was observed a decline to

4.6 percent from 5.7 percent as it was in

the same period of the previous year.

Total value of deposits in foreign

currency declined to 117.9 million from

138.3 million equivalent value of euro, in

June 2014. Higher decline of deposits

compared to the increase of loans in

foreign currency led to loans to deposits

ratio in foreign currency to increase to

5.3 percent from 4.3 percent, in June

2014 (figure 78).

Interest rate risk

The banking sector is relatively well

protected against changes in interest

rates, due to the fact that loans and

deposits have mainly fixed interest rates

and interest income and expenditures

from these items are not affected by

movements in interest rates until their

maturity. Around 91.2 percent of total

loans had fixed interest rates, in June

2015, while 100 percent of total deposits

have fixed interest rates (figure 79).

However, the changes in interest rates

can have an impact in terms of

refinancing risk and reinvestment of

assets depending on the composition of the maturity of assets and liabilities that bear interest

(figure 80), and movement direction of the interest rates. Assets to liabilities ratio which bear

interest is almost the highest in the category with the maturity up to 30 days, where interest-

bearing liabilities exceed assets for euro 393 million. During June 2015, this gap has increased to

-393.1 million from -362.9 million euro in June 2014. Given that the gap is negative for this

category of maturity (the volume of interest-bearing liabilities is higher than assets), possible

changes in interest rates in short term are reflected more in expenditures compared to revenues

of the sector. Consequently, the banking sector is exposed to any possible increases in interest

0.4%0.4%

0.3%0.3%

5.7%5.7%

5.7%

4.6%

6.3%5.5%

4.3%

5.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%


The share of loans in foreign currency in total loan portfolio

The share of liabilities in foreign currency in total liabilities

Loans in foreign currency against deposits in foreign currency

Figure 78. Loans and deposits in foreign currency

Source: CBK (2015)

90.5% 91.2%100.0% 100.0%

9.5% 8.8%

50%

60%

70%

80%

90%

100%


Loans sensitivity to interest rate Deposits sensitivity to interest rate

Fixed interest rate Changeable interest rate

Figure 79. Loans and deposits sensitivity to interest rates, by interest rate type

Source: CBK (2015)


| 61

rates in short-term period as the cost of

refinancing of deposits will grow faster

than the interest income may grow

regarding the longer maturity of assets.

However, during the period of six

months, the cumulative gap widened and

remained positive mainly due to the

decline of the interest-bearing liabilities.

In June 2015, interest-bearing assets

and liabilities for the period of maturity

up to 1 year reached euro 250.1 million

as unlike the gap of euro 20.1 million, in

June 2014. In this situation of the

positive gap, the interest rate changes in

the one-year period affects more the revenues than in expenditures of the sector, thus the overall

sector exposure to interest rates increase is almost neutralized.

Box 4. Identification of systemically important Banks in Kosovo

The model for identifying banks with systemic importance represents a tool for continuous assessment of

the degree of systemic importance of commercial banks in the country. Primarily, a bank is considered to be

of systemic importance if it is expected that its potential failure would be manifested with significant

negative consequences for the functioning and stability of the entire sector and for the economy in general.

Therefore, continues monitoring of the degree of systemic importance is considered to be of particular

importance for financial stability as it enables the identification of banks whose potential failure might have

a larger impact on the financial sector and the economy in general.

Table 6. Indicators used to identify systemic importance of the banks in Kosovo

Source: CBK (2015)

This article presents an assessment of the degree of systemic importance for all the banks and their

branches operating in the Kosovo’s banking market, based on the data of June 2015. For assessing the

systemic importance of banks the model is based on four basic criteria: size, substitutability,

Criteria Indicators

The share of cash and balance w ith the CBK

The share of sector assets

The share in the market of the sector deposits

Ow n capital of the bank to total sector capital ratio

The share of the sector securities

The number of depositors to total depositors

The share of liquid sector assets

The share of agricultural loans of the sector

The share of consumer loans of households

The share of loans to industry, manufacturing, energy and construction

The share of trade loans

The number of transactions to total transactions throught payment system

The share of Kosovo's Government securities

The share of total market loans

The share of deposits and borrow ings from other financial corporations and other banks

The share of loans for other financial corporations

The share of placements in other banks (not including parent bank)

Complexity

(weight 10%)Off-balance items share

Size

(weight 40%)

Replacement

(weight 40%)

Interconnection

(weight 10%)

-600

-400

-200

0

200

400

600

800

1-30 days 31-90 days 91-180 days 181-365 days 1-5 years Over 5 years

June 2014 June 2015

Source: CBK (2015)

Figure 80. The gap of assets and liabilities sensitivityto interest rate, in millions of euro


62 |

interconnectedness and complexity criteria. The first two criteria suggested by base model (size and

substitutability) are considered as fundamental criteria for determining the systemic importance in the case

of Kosovo, therefore, their weight in the model is dominant with 40 percent each. While the other two

criteria (interconnectedness and complexity) are weighted with 10 percent based on the fact that Kosovo’s

banking sector has low degree if interconnectedness of institutions in terms of cross lending and borrowing

and it is based on traditional banking activities where the complexity degree is low.

For each of these criteria, respective indicators have been identified through which the systemic importance

of each bank is assessed. The indicators used are shown in table 6, and each of the indicators within a

particular criterion is given equal weight. The selection of indicators is done according to the suggestions of

framework based on which this model was developed.21

The general assumption in relation to size criteria, is considered as the main criteria for measuring the

systemic importance of an institution, is that the larger the share of the bank is to the total sector the more

significant it is its systemic importance as the affected parties from possible shocks in this bank are more

numerous and the costs for the entire sector and the economy are larger. The size of the institution is

intended to be measured both in terms of the total share of the assets to total assets of the sector, as well as

in specific aspects of the balance sheet such as the share of deposits of the appropriate bank to total deposits

of the sector, the number of depositors, the share of the cash and reserves, etc. in order to reflect the

importance of the respective bank in the specific aspects/ segments of the banking activity, as for instance,

the number of depositors who might be affected in case of problems or potential bankruptcy of a particular

bank.

Substitutability criteria aims at measuring the extent of substitutability of products and services offered

from the respective bank by other banks in the market, in case of the failure of the respective bank. Key

assumption for the substitutability criteria is that the larger the share of a bank in a particular market

segment or in a certain type of service the higher is its technical capacity and knowledge for effective

functioning in the relevant segment (e.g. assessing credit risk for the agricultural sector), which make it

more difficult the replacement of its role in that respective segment by existing or new banks in the market.

Therefore, the systemic importance of an institution increases when the difficulties in substituting its

services and products are larger.

Interconnectedness criterion is intended to measure the degree of interconnectivity of the banking

institutions among themselves and with other financial institutions in the country in order to identify the

risk of the spill-over effect of the crises to the other financial institutions and to the real sector. This

criterion is of particular importance in measuring systemic risk in the countries with developed financial

sectors where interconnection between institutions are numerous and complex. In Kosovo, the inter-bank

market is almost non-existent and interconnections between financial institutions are limited to deposits

and loans that other financial institutions as insurance companies, microfinance institutions and other

financial auxiliaries have at commercial banks in the country. Consequently, the interconnection between

financial institutions will be attempted to be measured by the share of placements with other banks and

credit exposure to other financial corporations, as well as the share of deposits and borrowings from other

financial corporations.

Regarding the complexity criteria, it should be noted that its aim is to measure the degree of complexity of

the business model and operations of a bank under the assumption that the more complex the activity of a

bank is, the higher the interconnections and agreements with the third parties are, which increase the costs

and time of addressing the problems in case of bankruptcy. In the case of Kosovo, a proxy for measuring the

complexity of a bank has been suggested to be the share of the off-balance sheet items to total portfolio of

the assets of that bank.

To identify the systemic importance of a bank, the value of every indicator has been compared with the

average value of the corresponding indicator for the entire sector. In cases where the value of the indicator

of an institution has exceeded the average value of the sector, then that institution was considered to have

21

The model for the identification of systemically important banks is developed based on the basic principles of the model for the identification of systemically important

banks developed by the Basel Committee on Banking Supervision in June 2012, as well as in the previous model of the Central Bank of the Republic of Kosovo for

Identification the systemically important banks in Kosovo (Financial Stability Report no. 3, 2012). Evaluation and modification of the specifications of the model is done

consistently in order to enhance it.


| 63

systemic importance for that specific indicator. When the indicator was above the average of the sector (thus

it is of the systemic importance), it was given the value of 1, while on the contrary its value was set to 0.

Afterwards, these values were multiplied by the respective indicator weight, and when a bank resulted to

have systemic importance in half or more than half of the indicators of a single criterion, then this bank was

considered to be systemically important for that criteria. At the end, banks which had a sum of the weighted

average of each of the criteria equal to or higher than 50%,25 then those banks were considered to have

systemic importance. The higher the weighted average is, the higher the systemic importance of that

institution is.

Results

General results of the model with the data as of June 2015 are presented in table 7. Results remain similar

those of the same period of the previous year. The four largest banks operating in Kosovo continue to be

considered of an overall systemic importance. However, the interval of the degree of systemic importance

marked a slight decreased and extends from 65 percent for systemic bank with the lowest degree of systemic

importance, up to 91 percent for systemic bank with the highest degree, unlike June 2013 when the interval

was 65 percent – 94 percent. Among others, a contribution to this decline was given by a bank with a

general non- systemic importance whose interval increased to 40 percent in June 2015 from 9 percent in

June 2014. The increase of the weight of this bank with a general non-systemic importance was as a result

of the lending activity expansion and investments in securities compared to the previous period. Two of the

banks with overall systemic importance, similarly to the previous periods, resulted with systemic

importance in all criteria. While two others, despite the overall systemic importance, did not result to have

systemic importance in the interconnectedness criterion.

Table 7. Results of the banks in Kosovo with systemic importance, by criteria

(Listing of the banks was performed randomly)

Source: CBK (2015)

The results also suggest that one of the smaller banks, which did not result with general systemic

importance due to lower its lower share in the market, however turned out to have systemic importance in

two criteria - the interconnectedness and complexity (in June 2014 it had not systemic importance bank in

any of the above mentioned criteria). Also, it is worth noting that some of the banks, although it proved to

be systemically important for the criterion of substitutability and interconnectedness, appear to have a

significant share in some indicators such as number of transactions to total transactions through the

payment system, the share in securities of the Kosovo’s Government, its share to total loans issued to the

industry sector (mining, manufacturing, energy), and the share of deposits and borrowings from other

financial corporations and placements with other banks excluding parent banks. Such an outcome, where

banks are systemically important in several indicators and specific criteria, but not systemically important

in general, suggests that the effect of possible failures of these banks, however, may be important for sectors

and certain aspects of the financial and real sectors.

Banks/Criteria Size Replacement Interconnection Complexity TOTAL

Bank 1

Bank 2

Bank 3 √ √

Bank 4

Bank 5 √ √ √ √ √

Bank 6 √ √ √ √

Bank 7 √ √ √ √ √

Bank 8 √ √ √ √

Bank 9


64 |

6.5. Stress-test Analysis

Stress-test analysis represents an important tool to assess the sustainability of the sector against

potential shocks in the credit portfolio as well as in liquidity position, which may result from

unfavorable macroeconomic developments and changes in the market conditions. This analysis

assesses the impact of these shocks in the quality of credit portfolio, the bank's income, liquidity

position as well as its capital level.

The results discussed below are based on the Kosovo’s banking sector data of June 2014, which

were used to assess the sustainability of the sector against the credit risk, combined with interest

rate risk and exchange rate risk (market risk). In the analysis it was also tested the ability of the

banking sector to maintain liquidity under hypothetical assumptions about significant

withdrawal of deposits (liquidity risk).

The results of the stress tests analysis suggest satisfactory abilities of the sector to handle

'extreme situations' of exposure to these risks.

6.5.1 Credit risk

Methodology

Baseline scenario: The analysis is based on the hypothetic scenario when the economic

situation in the euro area and in the region would deteriorate, and this would reflect the Kosovo’s

economy mainly through a reduction in remittances and exports, thus discouraging overall

demand in the country. As a result, the economic growth in the country is supposed to deteriorate

by expanding the output gap and negatively impacting the quality of credit portfolio. In this

scenario it is considered the average rate of economic growth in Kosovo of around 3.4 percent in

the past five years and it is supposed an economic decline of 2.6 percent for 2015, which would

make the output gap to stand at 6.0 percent, whereas the impact on the credit portfolio quality,

respectively in non-performing loans (NPL), it is estimated by considering a coefficient of

elasticity of the NPL to the output gap of 0.8,22 where the share of NPL to total loans of the

banking sector would grow by 4.8 pp. As a result of the shocks to the real sector, it is considered

that the following year will not be marked by an increase in lending.

In an additional scenario to the baseline scenario, besides the credit risk, are also considered the

effects of the market risk in the sector revenues. Hence, the credit risk is combined with the

interest risk and exchange rate risk. Interest rates on assets are assumed to decline for 2.0pp,

while interest rates on liabilities are assumed to mark an increase of 1.5pp mainly as a result of

interbank competition. The depreciation of euro currency against other currencies was supposed

to be 20 percent.

The effects of the abovementioned assumptions on the banking sector reflect as follows: the

increase of the NPL share to total loans has an impact on the provision increase; depreciation of

euro has an impact on the revaluation of loss/profit from net open positions, and the reduction of

interest rates affects the losses/profits of net interest income considering the maturity of loans

and liabilities and their reinvestment/refinancing.

In addition to these assumptions, it is considered the expected profit as loss absorption from

these shocks. In this context, it is assumed that the profit will also be affected by the

abovementioned shocks, mainly through the decline of the ability of generating interest income

as a result of the failure of loans (NPL growth). Therefore, the expected profit of banks was

calculated for the first six months of the year while the profit for the second half of the year was

calculated based on the net profit after the tax of the year 2014, by initially applying first shock

22

IMF unpublished note "CESE Bank Loss Projection and Stress Testing Exercise", July 2009.


| 65

of 40 percent to reflect the effect of no lending growth, and then were deducted the revenues that

would be received if NPL did not increase.23

The assumed increase of NPL is expressed through the migration of performing loans by

categories (standard, watch, substandard) towards non-performing categories (doubtful and loss).

This increase is proportionally distributed within the category of doubtful loans and loss loans,

taking into account the initial of these categories to total NPL. NPL growth is reflected in the

level of provisions based on the CBK regulations for loan provisioning. The assumption for the

NPL growth is applied also to off-balance items which include unused commitments, guarantees,

available credit notes, and commercial credit notes.

Despite the fact that in the additional scenario was considered the depreciation of euro against

foreign currencies to assess the risk of the exchange rate, it is important to note that the impact

of this risk on the balance sheet of the banking sector continues to be minor due to the low value

of net open position in foreign currency.

The scenario on the interest rate risk implies a reduction of interest rates on assets for 2 pp the

increase of balance sheet liabilities for 1.5pp. The reduction of interest rates may affect the net

interest margin (NIM), especially taking into account the maturity of loans and deposits because

the majority of loans and deposits in the banking sector have fixed interest rates and changes in

interest rates are not reflected until maturity. The negative effect on revenues from the interest

rate decline on assets side is furtherly emphasized from the negative effect that has increased

interest rate on liabilities.

Other additional scenarios: Besides basic scenarios mentioned above, additional scenarios on

credit risk analysis are also considered the failure of the largest borrowers in each of the banks,

as well as the coping level of NPL for each bank before the problems with capitalization appear.

As a conclusion, the stability of the banking sector in this analysis is assessed in terms of impact

of the hypothetical scenarios on the level of regulatory capital of the banking sector, risk

weighted assets and, consequently, the Capital Adequacy Ratio (CAR).

Results

The banking sector level in terms of capitalization of banks, in June 2015, was very favorable,

with the CAR to 18.5 percent (table 8). The banking sector continued to have a good level also in

terms of non-performing loans to total loans, which stood at 7.2 percent, as well as their coverage

level by provisions which in June 2014 reached 119.3 percent. Therefore, as a result of the good

initial position and the higher profitability since the beginning of its operation, the banking

sector has shown a high level of resistance to the credit risk also under conditions of the

assumption of a hypothetical scenario as described above.

Under baseline scenario assumptions for assessing the credit risk (balance and off balance sheet),

in which the share of NPL to loan portfolio would increase by 4.8pp, while the expected profit for

the whole year would be used to absorb losses - CAR of the banking sector would decrease to 18.2

percent,24 which is above the minimum of 12 percent as required by the CBK. However, at the

level of individual banks, CAR for one of the banks would decline below 12 percent. Additional

needed assets to restore the capitalization to the required level would amount to euro 0.15

23

Assessment of 'loss' revenues as a result of rising NPL was originally made by calculating ex post of the interest rate on loans for each bank, which is then multiplied

by the value added to NPL.

24 It is worth mentioning that in this edition there is methodical change, the same as in Stability Report no. 6, in credit risk assessment, where the estimated annual losses

henceforth are not deducted from risk-weighted assets for purposes of calculating the capitalization rate (CAR) after the shocks. This change is in accordance with

practice that loans classified as loss do not happen to be deleted from the balance sheet before passing a year, and since time horizon of stress test analysis is one year,

it is suggested that such losses remain within risk-weighted assets by a factor (weight) of the same risk. This methodological change represents a conservative approach

to assessing credit risk in comparison with previous editions.


66 |

million (equivalent to 0.003 percent of the value of GDP forecasted for 2015). In these

circumstances, the share of NPL to total loans of the banking sector would amount to 12.0

percent, while at the level of individual banks the highest level of the NPL rate would reach 14.6

percent.

Based on the above assumption shocks, total loss of the banking sector would reach a value of

euro 75.6 million (1.3 percent of GDP). However, this value can not be considered fully as

possible loss of the sector to be taken into account that a large part of this loss would be absorbed

by the expected profit for the considered period. Also, a part of losses it is assumed that can be

offset by the realization of collateral or by reprogramming, but this aspect is not considered for

purposes of this analysis.

Results of additional scenario, in which credit risk is combined with market risk, which along

with the increased NPL rate of 4.8 pp, it is included also the depreciation of euro and the decline

of interest rates in aforementioned levels, CAR of the banking sector would decline to 17.5

percent. Two banks would mark a decrease below the minimum regulatory of CAR of 12 percent,

and the needs for recapitalization would reach euro 1.84 million (0.03 percent of GDP). In this

scenario, the effect of the euro depreciation is represented at a low level due to the low value of

the net open position in comparison with the effect of the in interest rates decline which was

more significant.

An additional scenario assumes the failure of large exposures. The results of the scenario in

which it is supposed the failure of the three largest borrowers in each of the banks suggests that

CAR would drop to 17.1 percent. In these circumstances, at one bank CAR would drop below the

required minimum level of 12 percent and additional needed assets for increasing the capital at

the minimum required level would be euro 8.48 million (equivalent value of 0.15 percent of GDP

estimated for 2015). Assuming the failure of the five largest borrowers in each bank, the CAR of

the sector would decline to 15.6 percent, while the number of under-capitalized banks would

reach two of them. The value needed for the recapitalization of the banking sector would amount

to euro 13.1 million (equivalent value of 0.23 percent of GDP estimated for 2015).

Table 8. Summary of stress-test results: credit risk

Note: 1/ Out of the nine banks considered in the stress-test analysis, the number of banks that drop below the required regulatory level, classified by categories.

Note: 2 / In reporting the minimum and the maximum values of indicators at banks level, in some cases are excluded the high values of CAR and the NPL value of 0

percent, with which banks are characterized in the beginning of their activity.

Source: CBK (2015)

Coping levels of NPL of each of the banks before the problems with capitalization would appear

(before CAR would decrease below 12 percent) seem to be quite high for most of the banks. In one

of the banks, NPL would increase up to 39.2 percent of total loans portfolio of that bank before

the need for additional capital would appear. In some banks, the capable NPL rate levels appear

lower, where the lowest level in one of the banks was 13.0 percent (representing a higher level of

4.8 pp of NPL prior the shock appeared). The banking sector as a whole is able to afford an NPL

CAR

<0

CAR

0-8%

CAR

8-12% Low er level Higher level

Level of the

sector Low er level Higher level

Level of the

sector

In millions of

euro

As % to

GDP

Levels prior to the shocks 0 0 0 13.2% 23.2% 18.5% 4.7% 9.8% 7.2%

Macroscenario shocks

Base scenario 0 0 1 11.9% 23.3% 18.2% 4.8% 14.6% 12.0% 0.15€ 0.00%

Combination with trade risk 0 0 2 11.3% 22.5% 17.5% 4.8% 14.6% 12.0% 1.84€ 0.03%

Failure of three borrowers 0 1 0 5.5% 20.3% 17.1% 4.6% 27.3% 15.4% 8.48€ 0.15%

Failure of five borrowers 0 1 1 2.2% 17.6% 15.6% 4.6% 33.3% 18.5% 13.05€ 0.23%

Number of banks 1/ CAR % NPL % Ricapitalisation

Description


| 67

ratio up to 19.1 percent without a need for additional capital injection would appear to maintain

the CAR of the sector at the required regulatory level of 12 percent.

6.5.2. Liquidity risk

Methodology25

Baseline scenario: Analysis of liquidity risk is based on the baseline scenario of withdrawing a

significant value of deposits from the banking sector, thus assessing the ability of the sector to

withstand such shock. More specifically, it is considered the withdrawal of 8 percent of deposits

on daily basis, over a period of five days in sequence, allocating 5 percent of remaining deposits

after each day due to operational purposes of the bank in the following days. Allocating 5 percent

of the deposits for operational purposes implies that, under these conditions, the required reserve

of 10% would be halved. The scenario is also built on the assumption that during this period the

possibility of converting liquid assets into cash would be 80 percent of liquid assets, while the

possibility of converting non-liquid assets into cash would be only 1 percent of these assets within

a day. Also, this scenario assumes that banks were unable to be financed through external

funding sources.

Additional scenario: Besides the aforementioned scenario, as an additional scenario on credit

risk analysis, the failure of the largest depositors in each bank, as well as the capable level of

withdrawals of deposits for each bank have been considered, before the need for additional

liquidity rises.

Finally, the stability of the banking sector in this analysis is tested in terms of assessing the

adequacy of banks’ liquid assets to cope with quite high withdrawal of deposits level, as well as

the adequacy of liquid assets to cope with potential risk of deposits concentration.

Results

The banking sector of Kosovo was characterized with high liquidity in June 2014, where the key

indicator of liquidity (liquid assets to short term liabilities ratio) stood at 41.5 percent. Thus, due

to high liquidity position, banking sector showed satisfactory level of stability to cope with the

very assumed conservative scenarios of deposits withdrawals.

Results of the baseline scenario of withdrawals of 8 percent of deposits per day, in five

consecutive days, suggest that Kosovo’s banking sector would start to have needs for additional

liquidity only on the third day, where two of the banks would have lack of liquid assets of euro

3.5 million (table 9). At the end of day four, problems with liquidity would have four banks,

whose need for liquidity would reach euro 28.3 million. At the end of the first day, problems

would appear also at another bank increasing the number of banks which would have problems

with liquidity for coping the supposed deposits withdrawal would reach a total number of 5

banks. The rate of total withdrawal of deposits on day five would reach 34 percent, and the

amount of additional liquid assets needed to overcome liquidity problems would amount to euro

63.5 million (1. 15 percent of projected GDP for 2015).

The assumption of the largest depositors’ failure in each bank results to be not significant for the

liquidity level in general in the banking sector. Results of this scenario suggest that Kosovo’s

banking sector does not have significant concentration of funding sources (deposits as the main

components of liabilities): therefore the immediate withdrawal of deposits from individuals or

companies with larger amounts of deposits does not pose serious risk for the sector.

25

Methodology of calculation of liquid assets has been changed in order to be in compliance with the CBK Regulation on liquidity risk management. Previously liquid

assets with aim of stress-test analysis were calculated according to the methodology of IMF Financial Soundness Indicators.


68 |

The endurable levels of deposit withdrawals for each of the banks before liquidity problems

would appear are generally considered to be quite high. The bank with the lowest threshold

stands at 14.5 percent, whereas the one with the highest threshold reaches 38.8 percent. At the

sector level, the threshold of total withdrawal of deposits was close to 28.3 percent, which means

that the banking sector may be able to cope with the withdrawal of one-thirds (1/3) of the total

deposits without needing additional liquid assets. In this case, under the assumption that the

loans value would not increase, loans to deposit ratio for the banking sector would reach 108.1

percent.

Table 9. Summary of stress-test results: liquidity risk

Note:1/ Out of nine banks considered in the stress-test analysis, the number of banks which would drop under the needed regulatory level,

classified by categories.

Source: CBK (2015)

6.6. Financial infrastructure in Kosovo

6.6.1. Payment System

Payment systems have an important role in the financial system and the economy of a country,

considering that their efficient and safe operation represents a very important factor in

maintaining and promoting the financial stability. In Kosovo, there is a single system for

interbank payments, Electronic Interbank Clearing System (EICS), operated and supervised by

the Central Bank of the Republic of Kosovo. Electronic Interbank Clearing System (EICS) is a

hybrid system of payments, whereby payments of low and high value are processed, as well as

urgent payments.

The number and the value of transactions that EICS processed until June 2015, reached 4.7

million (4.3 million until June 2014), marking an annual growth of 9.0 percent. Whereas, the

value of total transactions until June 2015, reached euro 3.34 billion (3.18 billion until June

2014), marking an annual growth of 5.0 percent. The daily average of EICS transactions reached

39.0 thousands, while their value amounted to euro 27.8 million.

In relation to the number of transactions, the regular massive payments continued to have the

highest share within the payment instruments with 39.1 percent of the number of total payments

(table 10). These payments are primarily realized from for governmental institutions, followed by

the massive priority payments with a share of 36.2 percent mainly generated by governmental

institutions (execution of wages and pensions) and the Giro payments with a share of 13.7

percent, which mainly belong to utilities payments. Giro payments represent the payments

which marked the highest increase in number (641,423 until June 2015 from 452,014 until June

2014).

After the first day 0 0

After the second day 0 0

After the third day 2 3,518

After the fourth day 4 28,312

After the fifth day 5 63,533

Description Number of banks 1/ Additional liquid needed assets (in thousands of year)


| 69

Table 10. The share of payment instruments to total EICS transactions

Source: CBK (2015)

In relation to the value of transactions, regular payments continue to lead the payment structure

(46.6 percent of the total value of transactions). Giro payments continue to be listed as second

with a share of 13.5 percent until June 2015. Prioritized payments and Prioritized-massive

payments were characterized by a more significant increase in value, during this period, which

was also reflected in their substantial increase of their share in the payments structure. Priority

payments processed through EICS increased their share to 10.0 percent in June 2014 from about

9.4 percent in June 2014, mainly as a result of their significant increase in value (euro 333.9

million in June 2015, from euro 299.9 million until June 2014). Prioritized-massive payments

increased their share to 10.3 percent from 9.6 percent in June 2014 and reached a value of euro

345.6 million (305.5 until June 2014). Securities payments through EICS during this period

marked a slower growth rate (euro 363.4 million until June 2015 from euro 355.3 million until

June 2014) which resulted in the decrease of their share in the structure for 0.3 pp. This decline

in share of the total value of EICS transactions may be affected by the slowdown of securities in

the banking sector compared with the pronounced increase over the same period of the last year.

Total number of valid bank accounts reached 1.87 million accounts in June 2015, implying that

on average almost every citizen in Kosovo is equipped with a bank account.26 If we compare the

number of bank accounts in the country with June 2014 there is a decrease of 0.3 percent of total

bank accounts.27

E-banking accounts through which users access online the banking services have continued to

grow. Until June 2015, the total number of e-banking accounts reached 164.583, representing an

annual increase of 11.4 percent. Consequently, the number and the volume of transactions

through e-banking service have increased. Total number of transactions executed through e-

banking accounts reached 1,029.752 until June 2015 (680,315 until June 2014). Total value of

transactions executed through e-banking accounts until June 2014 amounted to euro 2.44 billion

(euro 1.67 billion until June 2014).

The structure of e-banking accounts continues to be dominated by resident accounts with a share

of 97.5 percent in June 2015. Within the accounts of residents, individual bank accounts

constitute around 78.8 percent of the total accounts of residents and the remainder of 21.2

percent is comprised of business accounts. Similarly, the structure of the accounts of non-

residents is dominated by individual accounts (90.9 percent in June 2014), while business

accounts have a share of 9.1 percent.

The total number of cards (debit and credit cards) that provide services for cash withdrawals and

various payments marked an annual growth of 8.9 percent in June 2015. The number of cards

with a debit function, in June 2015, reached 690.914, while the credit cards reached 126,812. The

26

According to the Kosovo Agency of Statistics, in December 2014 the total resident population was 1,804,944.

27 The total number of bank accounts includes: number of current accounts, savings and other bank accounts.


Regular 10.7% 10.5% 48.2% 46.6%

Priority 0.3% 0.3% 9.4% 10.0%

Regular - massive 41.7% 39.1% 8.3% 8.5%

Priority - massive 36.6% 36.2% 9.6% 10.3%

Giro payments 10.5% 13.7% 13.3% 13.5%

Securities 0.0% 0.0% 11.2% 10.9%

Driect debit 0.2% 0.2% 0.1% 0.1%

Description Number of total transactions Value of total transactions


70 |

number debit cards was characterized with an annual growth of 9.0 percent, while credit cards

with an annual growth of 8.2 percent in June 2015. Higher share of debit cards and credit cards

until June 2015 had Visa cards (71.9 percent and 89.2 percent, respectively), followed by Master

Card cards (27.9 percent and 9.3 percent, respectively).

Banking Infrastructure in terms of Automated Teller Machines (ATM) networks and Point of

Sales (POS) has marked an increase. The number of ATMs and POSs (enabling payments at the

point of sales) marked an annual increase of 3.7 percent and 2.8 percent, respectively, in June

2014. Total number of ATMs installed by commercial banks, in June 2015, was 505 while the

number of POSs reached 9,449 (table 11).Until June 2015, the number of withdrawals through

ATMs reached to 5.0 million (4.7 million until June 2014), with a total amount of euro 533.6

million (450.1 million until June 2014). The number of payments through POS terminals, until

June 2015, reached 2.5 million, amounting to euro 143.7 million.

Table 11. Banking Sector Network

Source: CBK (2015)

The value of cash withdrawal through ATMs to total card transactions reached to 74.6 percent by

June 2015, which shows the high level of cash usage. While the value of payments through POS

to total card transactions reached 20.1 percent as of June 2015 (table 12).

Table 12. The share of transactions value with cards by terminals to total value of cards, in

percent

Source: CBK (2015)

Despite the high share of cash withdrawals in the total value of card transactions, table 12 shows

that compared with previous years the share of cash withdrawals to total value of card

transactions has decreased. While cash withdrawals at ATM terminals in June 2012 accounted

for 81.4 percent of the total value of card transactions, cash withdrawals in June 2015 comprised

74.6 percent of the total value, decreasing their share by 6.8 percentage points. The increased

number of ATMs that enable money depositing in customer accounts had an impact on this

category to increase the share to 4.4 percent until June 2015 from 0.6 percent as it was until

June of the last year.


Number of ATM 472 493 487 505

Number of POS 7,713 9,039 9,191 9,449

Number of e-banking accounts 100,519 113,171 147,739 164,583


ATM cash w ithdraw als 81.4% 81.1% 79.7% 74.6%

ATM depositing 0.0% 0.1% 0.6% 4.4%

Credit transfers through ATM 0.1% 0.1% 0.1% 0.0%

Cash w ithdraw als through POS 1.8% 1.7% 1.3% 0.9%

Payments through POS terminals 16.6% 17.1% 18.3% 20.1%


| 71

7. Pension Sector

7.1 Structure of pension sector

Pension sector continues to be the sector with the highest growth rate of asset within the

Kosovo’s financial system. The value of the pension sector assets, until June 2015 amounted to

euro 1.18 billion, recording an annual increase of 18.1 percent. The majority of pension savings in

Kosovo continues to be administered by the Kosovo Pension Saving Fund (KPSF), which

manages 99.5 percent of total assets of the pension sector. While, the rest of the assets is

managed by the Slovenian-Kosovo Pension Fund (SKPF) (table 13).

Table 13. Structure of pension funds by ownership

Source: CBK (2015)

Regarding KPSF, the structure of assets

until June 2015, was dominated by

investments in the foreign market with a

share of 89.5 percent of total

investments (figure 81). The remainder

of assets consists of investments in

securities of the Kosovo’s Government

(6.8 percent) and deposits at CBK (3.7

percent). Compared with the period until

June 2014, KPSF has withdrawn the

majority of the deposits held at CBK and

has invested in investment funds in the

external sector mainly due to the higher

return rate. The majority of these

investments abroad are in the form of shares and treasury bills of foreign governments.

Investments abroad dominate the structure of SKPF assets as well. In June 2015, 85.3 percent of

total SKPF assets were invested abroad, while the remaining of 14.7 percent represents

investments in Kosovo. In figure 81 can be observed a continuing growth trend of SKPF

investments in the external sector.


Kosovo 99.3% 99.4% 99.4% 99.5%

Slovenia-Kosovo 0.7% 0.6% 0.6% 0.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

In the country Abroad In the country Abroad

KPSF SKPF


Figure 81. Structure of pension sector investments, in percent

Source: CBK (2015)


72 |

7.2. Performance of the Pension Sector

Pension sector during the first half of

2015 was characterized by positive

financial performance. Both funds

recorded a positive return on

investments and an increase in share

price (figure 82 and 83). Until June

2015, KPSF has realized gross euro 37.5

million gross investment returns

compared to the value of euro 31.9

million in the first half of 2014. The

value of contributions received until

June 2015 amounted to euro 57.7

million, while the number of

contributors was increased for 29

thousands. The value of KPSF share

price,28 on the last day of June 2015

reached euro 1.33, marking an annual

increase of 6.4 percent. At the same

time, the share price of KPSF in June

2015 reached the highest value ever

recorded, recovering from the significant

decline in 2008 due to the global

financial crisis.

With increased activity and positive

performance, in the first half of 2015,

was characterized SKPF as well. Until

June 2015, the gross return on

investments of SKPF amounted to euro

164.8 thousands (euro 241.3 thousands

until June 2014). The value of contributions received until June 2015 amounted to euro 196.4

thousand with 3,973 contributors. On the last day of June 2015, the share price of SKPF reached

euro 147.89 (euro 143.84 in June 2014).

28

Base value of the share price for the KPSF is = 1, whereas the base value of SKPF is = 100.

654.1803.7

996.9

1,178.3

1.07

1.14

1.25

1.33

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

0

200

400

600

800

1000

1200


Në m

ilio

në eu

roAssets (in millions of euro) Share price, in euro (right axis)

Figure 82. Assets of KPSF

Source: CBK (2015)

4.95.1

5.66.0127.07

132.92

143.84

147.89

115.0

120.0

125.0

130.0

135.0

140.0

145.0

150.0

3.0

3.4

3.8

4.2

4.6

5.0

5.4

5.8

6.2


In m

illio

ns o

f eu

ro

Assets (in millions of euro) Share price, in euro (right axis)

Figure 83. Assets of SKPF

Source: CBK (2015)


| 73

8. Insurance Sector

8.1 Structure of Insurance Sector

The structure of the insurance sector continues to be dominated by “non-life” insurance which

represents 90.2 percent of the insurance market, while the remaining of 9.8 percent accounts for

“life” insurance. During the last year two new companies were licensed in the domestic market

with domestic capital, increasing their number to 15. Out of these, 12 companies offer “non-life”

insurance products, while three companies continue to offer “life” insurance products. The

insurance sector in Kosovo is dominated by foreign-owned companies, which in June 2015

managed 72.5 percent of total insurance sector assets.

The number of insurance companies with the origin from Albania increased by one. Consequently

the number of companies originating from Austria and Albania increased to six companies as a

result of the change of ownership of a local company. In June 2015, insurance companies

originating from Austria and Albania comprised 45.0 percent of total assets of the insurance

sector. In the insurance market operate five companies which together represent 27.5 percent of

the sector assets. Despite the fact that during this period were added two local companies, selling

of one relatively large local company, led to a share decrease in the insurance market by 6.1

percentage points compared to June 2014. Slovenia is represented by two companies which

manage 14.0 percent of total sector assets. While Turkey and Croatia are represented with one

company each which manage 7.7 percent and 5.8 percent, respectively, of total assets of the

insurance sector (figure 84).

The degree of market concentration in

the insurance sector can be considered

low, especially compared with the degree

of concentration of the banking market.

Herfindahl-Hirschman Index calculated

for the assets of insurance companies

shows 817.2 points in June 2015 (901.0

points in June 2014). However, the

degree of concentration to premiums

ratio was higher than to assets ratio,

where in June 2015 the Herfindahl-

Hirschman index for premiums was

1122.6 points (1088.8 points in June

2014). Similar difference is observed also

when compared to the share of the three largest companies to total assets and premiums of the

sector, where in June 2015 the share to total assets was 33.3 percent, while to total premiums

was 42.9 percent. The reduction of concentration in assets was affected by the expansion of the

insurance market for two companies and the faster annual growth of assets of smaller companies

(14.7 percent) compared to the three largest companies (5.7 percent). While the increase of the

concentration in the premiums market, in June 2015, with annual growth of 3.5 percent were

characterized three largest companies compared with the decline of 2.4 percent of other

companies.

8.2. Activity of the Insurance Sector

In June 2015, the value of insurance companies assets amounted to euro 151.2 million, marking

an annual increase of 11.5 percent, representing an acceleration of growth compared with the

annual growth rate of 4.2 percent in June 2014. The structure of assets of insurance companies

26.0% 29.5% 30.0% 28.6%

34.1%34.2% 33.6%

27.5%

17.1%15.9% 14.6%

14.0%

5.8% 5.3% 5.3%

5.8%

8.2% 6.7% 7.6% 16.4%

8.8% 8.3% 8.9% 7.7%


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Austria-Albania Kosovo Slovenia Croatia Albania Turkey

Figure 84. Structure of insurance companies assets, by ownership

Source: CBK (2015)


74 |

continued to be dominated by deposits, which represent 58.9 percent of total assets. The rest is

represented by fixed assets, technical assets, cash, etc. (figure 85).

Within total assets of the insurance

sector, the categories that marked more

significant increase were technical assets

(33.5 percent), followed by the debtors of

the premiums (10.4 percent) and

deposits (14.1 percent). Meanwhile,

intangible assets and cash declined by

12.5 and 8.3 percent, respectively.

Within liabilities, technical reserves lead

with 56.7 percent of total liabilities,

while the remainder is comprised of own

capital, other liabilities and loans (figure

86). The value of own capital in June

2015 recorded an annual growth of 8.4

percent. On the growth of own capital,

higher contribution was given by the

increase of the share capital of two new

companies which have begun operating

in the insurance market.

Until June 2015, the value of gross

written premiums amounted to euro 40.3

million, marking an annual decline of 0.1

percent (table 14). Within ”non-life”

insurance, the gross value of written

premiums of “non-life” insurance

amounted to euro 38.9 million and

marked an annual decline of 0.1 percent.

Within 'non-life' insurance, premiums

received from the third party liability

(TPL) amounted to euro 21.4 million

until June 2015, representing an annual

decline of 2.9 percent. While premiums

received from 'border policies' and

'voluntary policies' recorded an annual

increase of 3.5 percent and 4.9 percent,

respectively, until June 2015. The value

of written premiums within 'life'

insurance recorded an annual growth of

5.0 percent, reaching euro 1.4 million,

until June 2015. The value of claims

paid by insurance companies and Kosovo Insurance Bureau (KIB) until June 2015 amounted to

euro 19.5 million, marking an annual increase of 14.3 percent, mainly as a result of increased

paid claims to “non-life insurance” (table 15). Within 'non-life' insurance, during this period was

recorded an expenses increase of claims paid to the category of "third party liability" which

amounted to euro 12.3 million until June 2015 (9.7 million until June 2014).

7.2%

58.9%

4.1%7.5% 9.1%

11.4%0.2%

1.5%

Cash Deposits

Other financial assets Premium debits

Technical assets Fixed assets (net va lue)

Intangible assets Other

Figure 85. Structure of insurance sector assets, in percent

Source: CBK (2015)

1.5%

34.4%

56.7%

7.4%

Loans Own capital Technical reserves Other liabilities

Figure 86. Liabilities and equity of insurance companies, in percent

Source: CBK (2015)

35.4

40.5

40.340.3

14.7

21.2

17.119.5

41.5%

52.3%

42.4%48.4%

0%

10%

20%

30%

40%

50%

60%

0

5

10

15

20

25

30

35

40

45


In p

erc

ent

In m

illions o

f euro

Premiums received Claims paid Claims/Premiums (right axis)

Figure 87. Primiums received and claims paid, in millions of euro

Source: CBK (2015)


| 75

Table 14. Goross premiums received, in millions of euro

Source: CBK (2015)

Claims paid by 'life' insurance until June 2015 amounted to euro 0.1 million, while claims paid by

KIB amounted to euro 2.2 million (euro 1.9 million until June 2014). Claims paid to premiums

written ratio in June 2015 amounted to 48.4 percent compared to 42.4 percent in June 2014

(figure 87).

Table 15. Claims paid, in millions of euro

Source: CBK (2015)

8.3. Performance of the Insurance Sector

Key indicators of the performance and stability of the insurance sector, in the first half of 2015,

decreased compared to the first half of 2014. Profitability continues to present the major concern

in terms of the sector performance. Until June 2015, the insurance sector recorded a loss in value

of euro 2.5 million, compared with the loss of euro 113.2 thousands of the previous year.

Non-life insurance continues to be characterized by loss compared to the positive financial

performance of the life insurance. By June 2015, non-life insurance had a loss of euro 2.8 million

compared with losses of euro 316.0 thousand during the same period of the previous year.

Meanwhile, life insurance recorded a profit from an amount of euro 236.3 thousands compared to

euro 429.2 thousand until June 2014.

Operation with loss of the insurance sector had an impact of further decline of profitability

indicators such as Return on Average Assets (ROAA) and Return on Average Equity (ROAE).

ROAA decreased to -3.6 percent (-0.2 percent in 2014) while ROAE to -10.2 percent (-0.7 percent

in 2014).29

The state of the insurance sector is better in terms of capitalization. The sector remains well

capitalized, with capitalization rate of 34.4 percent, implying that the market will be in good

conditions to cope with potential shocks. Also, insurance companies during this period had a

satisfactory level of liquidity. Cash and its equivalents to technical reserves ratio stood at 116.8

percent in June 2015 (119.1 percent in June 2014), whereas cash and its equivalents to total

liabilities stood at 100.9 percent (102.8 percent in June 2014).

29

ROAA and ROAE are annualized based on the data of the sector until June 2015.

Description June 2013 June 2014 June 2015

Total gross w ritten premiums 40.5 40.3 40.3

Non-life gross premiums 39.6 39.0 38.9

Life gross premiums 0.9 1.3 1.4

Description June 2013 June 2014 June 2015

Claims non-life 18.6 15.1 17.2

Claims life 0.1 0.1 0.1

Claims KIB 2.5 1.9 2.2


76 |

9. Microfinance Sector and Financial Auxiliaries

9.1. Microfinance Sector

The microfinance sector was

characterized by expansion of its activity

during the first half of 2015. The value of

assets of the sector, in June 2015,

amounted to euro 116.3 million,



(figure 88).

Loans remain the main category of

sector assets given that represent 67.0

percent of total assets. In June 2015,

loans were characterized by annual

growth of 2.8 percent, reaching a value

of euro 77.9 million. The majority of

loans (65.2 percent of total loans) are

intended for households, followed by 34.8

percent of loans intended for enterprises

(figure 89). Despite the smaller weight,

loans intended for enterprise gave the

main contribution to the sector

expansion of lending activity considering

that they recorded an annual growth of

9.4 percent. Whereas, loans to

households were characterized by an

annual decline of 0.4 percent, mainly as

a result of competition from the banking

sector given that lending to households

by this sector during the same period

was characterized by a double growth

rate.

The structure of loans by economic

sectors remains similar to the previous

year where lending to the services

sector continues to lead the structure

with a share of 45.2 percent. In June

2015, one of the most credited sectors by

commercial banks represented by the

agricultural sector, which as regards

the IMF, represents one of the sectors

less credited. As a result of the decline

in loans issued to agriculture, the share to total MFI lending to economic sectors contracted to

25.2 (27.8 in June 2014), however agriculture remains one of the sectors most credited in the

microfinance sector, unlike bank lending where it has more limited access to financing.

Meanwhile, lending to industry sector expanded its share to 29.6 percent as a result of the

120.3

113.0 113.1

116.3

-5.7% -6.1%

0.2%

2.8%

-13%

-10%

-7%

-4%

-1%

2%

5%

8%

100

105

110

115

120

125

June 2012 June 2013 June 2014 June 2015In

millions o

f euro

Total assets Annual change (right axis)

Figure 88. Assets of microfinance institutions, in millions of euro

Source: CBK (2015)

65.2%

34.8%

June 2015

Households Enterprises

67.3%

32.7%

June 2014

Households Enterprises

Figure 89. Structure of MFI sector loans

Source: CBK (2015)

25.2%

29.6%

45.2%

June 2015

Agriculture

Industry, energy, and construction

Services

27.8%

26.3%

45.9%

June 2014

Agriculture

Industry, energy, and construction

Services

Figure 90. Structure of MFI sector loans, by economic activity

Source: CBK (2015)


| 77

significant growth of loans intended to construction. Loans to construction represent the category

with the highest share of 70.6 percent of total lending to the industrial sector (figure 90).

According to the maturity, the structure

of loans to this sector remains similar to

the same period of the previous year,

being dominated by medium-term loans

"over 1 to 5 years' which represent 84.1

percent of total loans. Short-term loans

'up to 1 year' account for 15.6 percent of

loans, and the remainder is represented

by long-term loans (figure 91). Compared

with the previous period, an increase of

medium-term loans to companies is

observed, while those intended for

households decreased their share.

Microfinance institutions continue to be

characterized by good quality of loan

portfolio. In June 2015, non-performing

loans (NPL) to total loans ratio

decreased to 5.4 percent (5.9 percent in

June 2014) mainly due to the decline in

the value of non-performing loans, while

the stock of total loans increased. To the

decrease of non-performing loans may

have had an impact the role of bailiffs

and wage increases in the public sector

since the majority of loans issued by

MFIs are intended for households. Also,

the coverage of non-performing loans by

provisions remains satisfactory,

improving to 109.5 percent in June 2015

compared with the level of 106.9 percent

in June 2014.

Average interest rates on MFI loans

continue to be significantly higher than

the interest rates applied by the banking

sector. The average interest rate on MFI

loans, in June 2015, was 24.2 percent

(25.2 percent in June 2014) (figure 92).

The interest rate on loans to households

decreased to 24.6 percent from 25.3

percent as it was in June 2014. Also, the

interest rate on loans to enterprises

decreased to 23.5 percent from 24.6 percent as it was in June 2014 (figure 93).

The average interest rate for the agricultural sector, in June 2015, was reduced to 25.2 percent

(25.6 in June 2014), for the services sector interest rate decreased to 23.7 percent (26.1 percent in

June 2014). On the other hand, the interest rate for the industrial sector increased to 23.4

percent from 22.4 percent in June 2014.

15.6%

84.1%

0.3%

June 2015

Up to 1 year 1 - 5 years Over 5 years

16.4%

83.2%

0.4%

June 2014

Up to 1 year 1 - 5 years Over 5 years

Figure 91. Structure of MFI sector loans, by maturity

Source: CBK (2015)

23.1%22.7%

23.5%

22.6%

23.5%

24.8%

24.0%

22.6%

24.1%

25.2%

23.4%

23.3%

24.1%

24.2%

21%

22%

22%

23%

23%

24%

24%

25%

25%

26%


2012 2013 2014 2015

Figure 92. Average interest rate on loans

Source: CBK (2015)

15%

17%

19%

21%

23%

25%

27%

29%


2012 2013 2014 2015


Source: CBK (2015)

Figure 93. Average interest rate on loans, be sectors


78 |

Leasing represents the second most important category of the sector assets with a share of 19.8

percent. Until June 2015, leasing amounted to euro 23.0 million, marking an annual increase of

2.0 percent. Leasing intended for households recorded an annual growth of 64.8 percent, mainly

as a result of the increased leasing for mortgage loans, while leasing for enterprises recorded an

annual decline of 27.6 percent as a

result of the sharp decline in financial

leasing in the form of mortgage loans

and leasing for equipment for

businesses. This result had an impact on

changing the structure of leasing.

Unlike the previous periods, in June

2015 the share of leasing intended to

households amounted to 51.9 percent of

the total value of leasing, thus

surpassing leasing intended for

enterprises in this period (figure 94).

Since MFIs do not have the legal right to

be financed by customer deposits, the

majority of liabilities of these institutions is comprised of foreign credit lines. Therefore, the

exposure of microfinance sector as regards to liabilities is high. In June 2015, the external

liabilities to total assets ratio of MFI was 54.5 percent (54.9 percent in June 2014).

9.2. Performance of the Microfinance Sector

The microfinance sector until June 2015 significantly increased its profit reaching euro 1.2

million compared with the profit of euro 13.6 thousand in the previous year. Operating with the

profit was primarily a result of increased revenues, while expenditures marked a decline.

The income of the sector amounted to euro 10.0 million in June 2015, representing an annual

increase of 7.1 percent. Income structure continues to be dominated by interest income with a

share of 83.4 percent. On the other hand, expenditures marked a decline of 5.6 percent, within

which the main contribution was given by expenditures for provisions of potential loan losses (a

decrease of 53.1 percent). The general efficiency indicator, which is expressed through

expenditures to income ratio, improved to 88.0 percent from 99.9 percent in the previous year.

The improvement of the financial performance was reflected in the improvement of profitability

indicators. Return on average assets (ROAA) improved to 2.1 percent from 0.6 percent in

December 2014. Also, return on average equity (ROAE) reached 7.7 percent30 in June 2015 from

2.4 percent in December 2014.

The number of employees in the microfinance sector was downsized to 785 in June 2015

compared with 799 in June of the previous year. The number of loans approved decreased to

34,188 in June 2015 compared to 36,371 in June of the previous year. As a result of the decline in

the number of loans approved, the average number of loans to employees ratio was reduced

compared to the previous year (table 16). Also, the reduction of the number of employees along

with the increase of 0.7 percent of personnel expenses had an impact on the personnel expenses

to the number of employees ratio to grow, in June 2015, compared with the same period of the

previous year. Whereas, the indicator that measures the average assets managed by one

employee increased compared to last year due to the expansion of the sector activity. Significant

improvement was also marked by the indicator which measures the average profit realized per

30

The calculation of ROAA and ROAE is based in the annualized profit for June 2015.

20.4% 23.9%32.1%

51.9%

79.6% 76.1%67.9%

48.1%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Enterprises Househlods

Figure 94. Structure of leasing, in percent

Source: CBK (2015)


| 79

employee, which is a result of the significant growth of the microfinance sector profits during the

first half of 2015 compared with the same period of the previous year.

Table 16. Additional efficiency indicators of the sector

Source: CBK (2015)

9.3 Financial Auxiliaries

The structure of the financial auxiliaries consists of the exchange bureaus and money

transferring agencies (MTA). This sector constitutes the largest number of financial institutions

in the country, but manages the smallest share of financial system assets (0.2 percent until June

2015). The value of total assets of financial auxiliaries until June 2014 amounted to euro 10.1

million, representing an annual increase of 12.6 percent.

Until June 2015, the income of financial auxiliaries amounted to euro 3.5 million, representing

an increase of 11.5 percent compared with the same period of the previous year. The income

structure of financial auxiliaries is dominated by the category of income from transfers, with a

share of 72.8 percent, which was characterized by an annual increase of 10.0 percent. On the

other hand, expenditures amounted to euro 1.8 million, representing annual growth of 12.8

percent. Net income of financial auxiliaries sector reached a value of euro 1.7 million until June

2015, representing an annual increase of 10.2 percent.

Assets/no. of employees (in thousands of euro) 131.0 140.7 141.6 148.2

Profit/no. of employees (in thousands fo euro) -2.9 -0.7 0.02 1.53

Number of loans/no. of employees 44.3 48.8 45.5 43.6

Personnel expenditures/no. of employees (in thousands of

euro)6.4 7.0 6.6 6.8



80 |

10. Statistical Appendix


| 81

Tabela 1. Indikatorët e qëndrueshmërisë financiare, në përqind

Regulatory capital to risk-w eighted assets17.2 15.0 17.4 19.0

Regulatory Tier I capital to risk-w eighted assets14.4 12.2 13.5 15.9

Nonperforming loans net of provisions to capital5.2 7.3 5.9 3.1

Assets quality Nonperforming loans to total gross loans6.5 7.8 8.2 7.2

Other financial corporations1.0 1.0 1.1 0.4

Public nonfinancial corporations0.08 0.02 0.01 0.03

Other nonfinancial corporations68.1 67.0 66.4 66.4

Households30.7 30.8 31.5 33.1

NPISH0.05 0.04 0.04 0.01

Nonresidents0.0 1.1 1.0 0.0

Total100.0 100.0 100.0 100.0

Return on assets (ROA)*0.8 1.0 2.0 3.1

Return on equity (ROE)*8.6 10.6 21.1 29.1

Interest margin to gross income75.4 74.0 74.5 76.4

Noninterest expenses to gross income86.6 82.0 68.8 52.7

Liquid assets (core) to total assets22.6 21.9 23.0 22.9

Liquid assets (broad) to total assets28.9 29.3 32.4 28.8

Liquid assets (core) to short-term liabilities28.3 27.9 29.2 29.0

Liquid assets (broad) to short-term liabilities36.2 37.3 41.2 36.5

Sensitivity to market risk Net open position in foreign exchange to capital-2.4 0.3 2.4 0.8

Encouraged set

Capital to assets10.3 10.5 10.1 11.7

Large exposures to capital80.9 79.0 89.6 77.1

Personnel expenses to noninterest expenses38.4 39.2 38.5 38.1

Spread betw een reference lending and deposits rates9.9 8.5 10.0 6.8

Customer deposits to total (noninterbank) loans112.2 116.3 124.4 126.0

Foreign-currency-denominated liabilities to total liabilities4.6 4.6 4.7 3.7

*Annualized for June 2015, net income before tax is considered.

Guide: Financial Soundness Indicators, Compilation Guide, IMF (2006)

Capital Adequacy

Sectoral distribution of loans to total loans

Earnings and profitability

Liquidity

Banking sector Core set June 2015June 2012 June 2013 June 2014


82 |

Table 2. Balance sheets of commercial banks, as of June 2015, in millions of euro

(In millions of euro)

Cash and balances w ith CBK 89.5 Balance from other banks 6.3

Balance w ith commercial banks 65.7 Deposits 630.6

Securities 185.4 Other borrow ings 0.3

Loans 474.9 Other liabilities 63.1

Fixed assets 6.8 Subordinated debt 19.0

Other assets 5.0 Ow n resources 107.8

Source: CBK (2015)




Securities 96.0 Other borrow ings -




Source: CBK (2015)




Securities 62.8 Other borrow ings 1


Fixed assets 12.4 Subordinated debt -


Source: CBK (2015)

Procredit Bank

Raiffeisen Bank

NLB Prishtina

TOTAL ASSETS 487.1

TOTAL ASSETS 804.9 TOTAL LIABILITIES

TOTAL LIABILITIES

Assets Liabilities

804.9

487.1

Assets Liabilities

827.1TOTAL LIABILITIES827.1TOTAL ASSETS

Liabilities Assets


| 83




Securities 14.4 Other borrow ings -


Fixed assets 5.7 Subordinated debt 11


431.4 431.4

Source: CBK (2015)




Securities 40.1 Other borrow ings 10.0




Source: CBK (2015)


Cash and balances w ith CBK21.2

Balance from other banks0.5

Balance w ith commercial banks6.8

Deposits159.8

Securities26.3

Other borrow ings0.0

Loans128.6

Other liabilities14.7

Fixed assets

6.3

Subordinated debt

1.0


Source: CBK (2015)

Banka Ekonomike

Banka Kombëtare Tregtare

Assets

TOTAL LIABILITIES

Assets Liabilities

TOTAL ASSETS

TEB Bank

Liabilities

269.5

Assets Liabilities

TOTAL ASSETS 269.5 TOTAL LIABILITIES

TOTAL ASSETS 190.5 TOTAL LIABILITIES 190.5


84 |





Deposits103.3

Securities8.7


Loans

87.5

Other liabilities

7.5



Source: CBK (2015)





Deposits49.7

Securities0.0

Other borrow ings1

Loans3.7


Fixed assets0.0

Subordinated debt0.0

Other assets

0.4Ow n resources

7.1

Source: CBK (2015)





Deposits20.1

Securities10.0


Loans34.1


Fixed assets0.8

Subordinated debt0.0

Other assets0.3

Ow n resources9.0

Source: CBK (2015)

Banka për Biznes

Assets Liabilities


Komercijalna Banka

Assets Liabilities

122.4TOTAL ASSETS 122.4 TOTAL LIABILITIES

Türkiye İş Bankası

Assets Liabilities



| 85

Table 3.1. FC survey - net foreign assets and domestic claims

(In millions of euro: End of period)

Description

Net foreign assets Domestic claims

Claims on non residents

prej të cilave:

Liabilities to nonresidents

Net claims on central government

Claims on other sectors

of which:

Moneta-ry gold

and SDR

holdings

Deposits Securities other than shares

IMF Quota

Shares and other equity

Claims on central govern-ment

Liabilities to central government

Loans

of which:

Other non finance-al corporatio

ns

House-holds

2005 827.3 890.9 __ 422.6 242.4 __ 145.3 63.6 348.9 -225.7 __ 225.7 574.6 565.6 439.6 126.0

2006 1,173.6 1,245.7 __ 660.0 341.3 __ 170.8 72.1 231.7 -475.0 __ 475.0 706.6 694.3 548.2 146.1

2007 1,622.4 1,704.6 __ 955.0 408.9 __ 175.4 82.3 124.5 -853.3 __ 853.3 977.8 965.9 765.1 200.6

2008 1,593.1 1,726.7 __ 795.1 661.6 __ 128.2 133.6 419.6 -871.8 __ 871.8 1,291.5 1,276.8 995.7 281.0

2009 1,700.5 2,036.2 60.3 910.1 724.5 64.3 144.3 335.7 571.5 -846.3 __ 846.3 1,417.8 1,396.1 1,052.3 343.5

2010 1,957.5 2,387.7 64.0 1,257.8 525.2 68.5 269.3 430.2 766.8 -824.8 __ 824.8 1,591.6 1,568.3 1,127.7 434.2

2011 June 1,988.0 2,421.3 60.9 1,171.3 640.0 65.4 293.9 433.3 840.1 -905.2 __ 905.2 1,745.3 1,716.2 1,233.3 482.1

September 2,108.2 2,511.5 63.3 1,297.5 539.1 68.0 332.7 403.3 862.2 -905.5 __ 905.5 1,767.7 1,740.8 1,235.1 504.2

December 2,067.8 2,446.0 65.1 1,359.4 230.0 70.1 533.1 378.2 987.5 -798.4 __ 798.4 1,785.8 1,785.8 1,242.1 514.6

2012 March 2,087.9 2,449.5 63.8 1,179.7 346.9 68.8 580.9 361.6 1,000.8 -788.9 29.9 818.8 1,789.7 1,762.0 1,238.7 521.1

June 2,081.2 2,445.1 66.4 1,257.2 239.1 71.9 598.7 363.9 1,057.1 -801.1 29.9 831.0 1,858.3 1,832.9 1,281.9 548.6

September 2,301.6 2,716.8 65.0 1,129.0 598.8 70.7 622.1 415.1 985.7 -848.8 73.6 922.3 1,834.5 1,809.6 1,260.9 546.3

December 2,337.1 2,773.4 63.3 1,260.7 486.0 68.8 666.5 436.3 1,079.9 -764.7 73.8 838.5 1,847.2 1,819.4 1,271.3 546.3

2013 March 2,376.5 2,821.3 63.3 1,189.5 515.7 69.0 734.5 444.8 1,112.0 -751.8 73.9 825.7 1,863.8 1,838.7 1,287.5 549.8

June 2,352.5 2,793.0 61.9 1,008.6 646.2 67.8 777.9 440.4 1,110.8 -798.6 110.9 909.5 1,909.4 1,882.0 1,314.8 566.1

September 2,541.1 3,003.2 60.7 982.4 826.8 66.8 816.9 462.1 1,095.2 -783.8 130.8 914.6 1,879.0 1,853.2 1,291.5 560.6

December 2,558.5 3,014.1 59.6 1,143.6 818.7 65.9 651.2 455.6 1,263.4 -620.8 153.2 774.0 1,884.2 1,859.9 1,291.1 567.7

2014 March 2,592.4 3,060.7 59.5 1,104.0 899.8 66.2 660.9 468.2 1,286.2 -620.7 190.1 810.8 1,906.9 1,883.2 1,313.4 568.5

June 2,528.5 3,002.1 59.9 1,045.1 803.3 66.9 752.4 473.6 1,393.3 -580.4 230.4 810.8 1,973.8 1,949.3 1,351.3 597.0

September 2,700.7 3,158.9 61.6 1,243.8 574.9 69.1 967.4 458.2 1,373.8 -589.1 227.0 816.1 1,962.9 1,939.2 1,325.5 613.4

December 2,648.4 3,113.3 62.5 1,414.7 315.7 70.4 1,024.4 465.0 1,507.3 -488.5 247.4 735.9 1,995.8 1,971.5 1,345.5 625.3

2015 March 2,764.8 3,251.1 66.5 1,467.3 329.0 75.3 1,078.7 486.3 1,530.6 -489.8 271.1 760.9 2,020.4 1,991.9 1,361.8 629.3

June 2,656.5 3,151.9 65.4 1,315.0 400.3 74.4 1,055.8 495.9 1,661.8 -467.5 298.1 763.1 2,126.8 2,096.8 1,431.4 664.6

Source: CBK (2015)


86 |

Table 3.2. FC survey - liabilities


Description

Deposits Loans

Insurance technical reserves

Shares and other

equity

Other items (net)

Transferable deposits of which:

Other deposits of which:

Net equity of househol

ds in pension funds

Prepayment of premiums&res

ervs against outstanding claims

Public non financial

corporations

Other non financial

corporations

Households

Public non fina-ncial cor-

porations

Other non financial corporati-

ons

Househ-olds

2005 830.6 315.0 67.6 76.8 155.5 515.6 181.3 33.7 298.9 3.0 174.5 152.4 22.1 165.8 2.2

2006 886.4 300.5 34.8 96.4 156.2 586.0 193.3 27.6 359.5 3.4 251.4 223.9 27.5 209.3 54.7

2007 1,110.9 386.1 49.6 133.5 187.5 724.8 188.4 43.8 489.3 … 316.1 286.2 29.9 273.8 46.0

2008 1,351.9 390.9 15.4 176.0 186.2 961.0 250.1 51.4 656.7 … 288.6 256.3 32.3 311.1 61.1

2009 1,444.3 483.2 50.1 184.0 237.7 961.0 73.9 82.9 801.9 … 422.3 380.8 41.5 326.1 79.3

2010 1,744.2 621.2 83.8 218.6 303.5 1,123.1 42.8 83.4 995.9 … 540.5 493.7 46.8 361.0 78.6

2011 June 1,757.0 591.0 71.6 185.9 315.2 1,166.0 48.0 75.0 1,039.9 … 602.7 551.5 51.1 373.1 94.7

September 1,900.1 661.3 98.3 205.0 336.9 1,238.8 51.7 81.0 1,102.9 … 598.5 545.9 52.6 377.3 93.7

December 1,933.6 658.4 68.1 208.1 360.9 1,275.1 60.8 79.7 1,129.6 … 647.8 593.3 54.5 389.7 75.0

2012 March 1,896.1 617.1 22.6 212.4 363.2 1,279.0 46.2 73.1 1,154.6 … 698.6 642.9 55.7 405.1 79.7

June 1,918.3 638.4 11.1 223.2 379.6 1,279.9 59.5 75.8 1,141.1 … 717.3 659.1 58.3 389.0 100.3

September 2,004.5 667.2 16.1 245.0 384.1 1,337.3 63.3 74.1 1,195.7 … 767.8 708.1 59.7 397.2 103.9

December 2,076.6 700.2 13.8 257.5 407.2 1,376.5 61.8 78.2 1,232.9 … 814.9 745.1 69.8 399.2 111.5

2013 March 2,077.8 692.3 19.1 234.4 415.8 1,385.5 50.9 74.2 1,255.5 … 866.8 800.3 66.2 403.6 122.3

June 2,048.9 698.9 16.0 231.8 425.2 1,350.1 48.8 75.4 1,221.3 … 880.0 808.8 41.2 398.0 116.6

September 2,169.0 761.8 14.4 270.8 450.9 1,407.2 72.9 73.6 1,255.6 … 932.2 859.5 72.7 397.5 115.3

December 2,275.3 848.0 16.4 299.6 506.6 1,427.3 55.7 98.2 1,268.4 … 990.3 919.0 71.3 403.9 129.7

2014 March 2,255.3 873.1 39.9 260.9 536.1 1,382.2 42.5 79.2 1,255.6 … 1,026.9 954.3 72.6 415.8 157.5

June 2,243.3 917.9 33.3 256.3 602.7 1,325.3 58.2 67.7 1,194.3 … 1,078.2 1,002.6 75.6 419.5 157.1

September 2,329.2 1,047.3 32.5 300.9 683.8 1,281.9 53.9 75.3 1,150.2 … 1,123.4 1,044.6 78.8 441.4 180.5

December 2,354.4 1,134.6 21.1 338.4 743.5 1,219.8 51.6 58.0 1,104.8 … 1,173.8 1,094.1 79.7 453.2 174.3

2015 March 2,380.8 1,184.9 30.9 306.0 818.7 1,196.0 37.8 66.6 1,086.5 … 1,256.3 1,175.0 81.3 479.8 178.5

June 2,393.0 1,217.7 10.9 335.3 841.8 1,175.3 36.7 72.4 1,062.8 … 1,270.0 1,184.3 85.7 484.3 170.5

Source: CBK (2015)


| 87

Table 4.1. ODC balance sheet – assets


Description

Total assets

Cash and balances with CBK

Balances with commercial banks

Securities Gross loans and lease financing

of which in euro: Gross loans in non euro

currency

Fixed assets

Other assets

In euro currency

In non euro currencies

Other financial

corporations

Public non financial

corporations

Other non financial

corporations

House holds

2001 519.8 265.1 212.8 212.8 . 7.5 25.9 __ __ 25.9 __ __ 4.5 3.9

2002 473.7 81.3 292.7 292.7 . … 86.5 __ __ 80.8 5.7 __ 9.5 3.7

2003 589.2 106.2 106.2 106.2 . 119.6 232.8 __ 0.2 193.5 39.0 __ 12.3 12.2

2004 816.5 116.5 186.0 169.2 16.8 112.3 373.7 __ … 289.9 83.7 __ 15.9 12.2

2005 984.4 131.7 221.9 201.0 21.0 82.9 513.9 __ … 387.9 126.0 __ 16.9 17.0

2006 1,161.2 141.1 243.3 218.8 24.5 99.4 636.6 __ … 490.5 146.1 __ 23.0 17.9

2007 1,435.0 189.0 208.1 173.4 34.7 78.9 892.1 __ 0.2 691.3 200.6 __ 27.2 39.7

2008 1,808.2 218.2 283.9 236.3 47.6 40.5 1,183.4 0.6 0.1 901.7 281.0 __ 39.0 43.1

2009 2,204.1 322.7 405.6 326.7 78.8 97.0 1,289.0 2.3 0.3 942.9 343.5 __ 43.1 46.7

2010 2,455.1 307.0 439.1 367.3 71.8 173.4 1,458.7 9.9 6.3 1,004.1 434.2 2.5 44.0 32.9

2011 2,649.7 331.5 329.5 251.8 77.7 202.0 1,698.1 17.3 1.5 1,127.0 510.9 7.3 47.4 41.3

2012 2,829.3 425.7 287.9 228.0 59.9 256.6 1,763.4 19.8 1.4 1,169.8 542.6 6.9 57.7 38.1

2013 September 2,935.4 438.3 328.4 228.5 99.8 276.0 1,798.0 18.8 0.3 1,195.1 556.5 6.3 56.3 38.5

October 2,952.0 452.8 333.6 230.0 103.6 271.7 1,798.8 18.6 0.3 1,186.9 566.5 6.4 55.5 39.5

November 2,976.7 468.4 332.0 239.4 92.6 278.1 1,803.2 18.9 0.3 1,193.4 563.9 6.3 55.2 39.8

December 3,059.3 463.3 339.9 258.8 81.0 354.5 1,805.8 20.4 0.2 1,194.5 563.9 6.1 55.5 40.3

2014 January 3,048.5 431.7 383.6 298.3 85.3 355.1 1,794.5 19.1 0.2 1,189.5 559.8 6.0 55.2 28.4

February 3,045.0 396.4 397.2 299.1 98.1 373.2 1,794.3 19.1 0.2 1,190.0 559.3 5.9 54.6 29.4

March 3,053.1 367.6 384.8 295.3 89.5 392.7 1,825.9 20.0 0.2 1,214.9 564.8 5.7 54.2 28.0

April 3,038.3 357.4 355.5 267.7 87.7 397.4 1,839.7 18.8 0.2 1,224.4 571.2 5.8 55.8 32.4

May 3,041.0 338.6 360.8 277.7 83.1 397.4 1,856.8 19.1 0.2 1,229.1 583.4 5.9 55.3 32.2

June 3,059.5 358.2 318.7 232.7 86.0 405.3 1,889.9 20.2 0.2 1,250.9 593.2 5.9 55.2 32.2

July 3,116.4 391.1 377.2 301.9 75.2 380.9 1,874.3 19.0 0.2 1,241.0 601.5 6.2 55.0 37.8

August 3,160.4 422.9 380.9 304.8 76.0 418.9 1,848.2 19.2 0.2 1,212.2 604.0 6.2 54.5 35.0

September 3,149.5 413.0 385.5 313.1 72.5 410.0 1,855.0 7.8 0.2 1,225.2 609.5 6.4 53.4 32.6

October 3,150.3 414.0 417.6 350.9 66.6 380.6 1,854.0 7.5 0.2 1,236.4 603.1 6.2 53.8 30.3

November 3,156.4 444.0 379.9 325.1 54.7 379.5 1,860.8 7.6 0.2 1,236.1 610.2 6.1 53.4 38.9

December 3,186.6 447.1 390.8 328.0 62.8 383.8 1,882.3 7.1 0.6 1,232.7 635.3 6.0 53.7 28.8

2015 January 3,212.9 423.6 444.0 381.7 62.3 396.4 1,863.1 7.2 0.2 1,230.5 618.5 6.1 54.3 31.5

February 3,223.9 433.4 448.9 390.3 58.6 372.0 1,874.9 8.1 0.3 1,242.3 617.4 6.1 54.0 40.7

March 3,250.3 422.3 444.7 366.6 78.1 400.7 1,903.5 9.2 0.7 1,261.4 625.6 6.2 53.5 25.6

April 3,256.8 391.7 423.8 363.7 60.2 422.3 1,936.4 8.8 0.2 1,284.9 635.6 6.1 52.8 29.7

May 3,262.2 397.1 395.5 336.4 59.1 429.4 1,957.4 9.1 0.3 1,294.4 646.7 6.4 52.7 30.1

June 3,269.6 397.4 341.9 286.0 56.0 443.8 2,005.2 9.0 0.6 1,328.0 660.8 6.3 52.7 28.6

Source: CBK (2015)


88 |

Table 4.2. ODC balance sheet – liabilities


Description

Total liabilities

Balances from other banks

Deposits Other borrowings (incl. non neg. CD)

Write -downs,

provisions

Other liabilities

Subordinated debt

Own resources

of which:

Transferable deposits

Other deposits:

Saving deposits

Share capital

2001 519.8 . 492.3 365.4 126.8 _ 5.0 … 2.0 … 20.4 18.4

2002 473.7 . 427.2 295.9 131.3 _ 5.4 … 6.6 1.3 33.2 30.8

2003 589.2 1.8 514.0 290.5 223.5 _ 8.9 … 17.5 2.0 45.0 44.1

2004 816.5 14.3 694.5 281.0 413.5 _ 1.4 … 27.9 9.3 69.1 57.7

2005 984.4 23.0 836.7 296.6 540.1 _ 6.4 … 37.3 7.0 74.0 62.4

2006 1,161.2 30.3 924.3 308.9 615.4 _ 4.2 … 92.1 7.0 103.3 78.4

2007 1,435.0 25.8 1,143.1 380.7 762.4 _ 2.7 … 103.7 7.0 152.7 114.9

2008 1,808.2 34.9 1,444.1 429.8 1,014.2 _ … … 129.8 7.0 192.5 145.9

2009 2,204.1 58.5 1,744.9 517.8 1,229.5 _ … … 171.7 24.4 204.6 159.4

2010 2,455.1 70.7 1,936.8 671.0 923.2 342.7 23.4 0.1 160.0 33.5 230.5 170.4

2011 2,649.7 40.0 2,104.0 699.0 1,056.8 348.2 30.4 0.2 191.3 31.0 252.8 176.6

2012 2,829.3 6.0 2,279.1 751.9 1,172.1 355.0 18.9 1.7 221.4 31.0 270.8 200.1

2013 September 2,935.4 9.8 2,344.7 826.6 1,134.9 383.2 10.8 1.9 239.2 56.3 272.5 219.2

October 2,952.0 11.5 2,354.6 828.4 1,140.7 385.4 10.7 1.9 240.0 56.3 276.8 220.2

November 2,976.7 15.1 2,359.2 833.1 1,135.5 390.5 10.6 2.0 258.8 56.3 274.7 220.2

December 3,059.3 16.5 2,449.0 900.8 1,143.9 404.2 13.4 2.0 244.1 56.3 277.8 221.2

2014 January 3,048.5 21.3 2,443.4 887.4 1,134.4 421.7 13.2 1.6 231.5 56.4 281.0 221.2

February 3,045.0 21.3 2,433.4 890.7 1,113.8 428.8 13.9 1.5 235.1 56.3 283.4 221.2

March 3,053.1 21.6 2,430.8 910.4 1,085.4 435.0 13.4 1.5 241.7 56.3 287.8 221.2

April 3,038.3 23.1 2,425.9 920.0 1,062.9 443.0 13.5 1.2 241.7 57.3 275.5 226.2

May 3,041.0 25.7 2,415.1 926.7 1,035.1 453.2 14.4 1.2 244.8 57.3 282.5 226.2

June 3,059.5 29.9 2,421.0 957.8 1,006.6 456.6 17.9 1.2 242.2 57.3 289.9 226.2

July 3,116.4 26.9 2,474.9 1,029.1 975.9 469.9 17.0 1.1 239.4 57.3 299.6 231.2

August 3,160.4 25.3 2,513.6 1,096.6 922.8 494.2 16.7 1.1 237.6 57.3 308.8 231.2

September 3,149.5 22.2 2,518.0 1,100.3 908.8 508.8 16.9 1.5 233.6 47.3 310.0 231.2

October 3,150.3 22.5 2,514.0 1,112.3 880.1 521.6 17.0 1.6 235.2 47.3 312.7 231.2

November 3,156.4 27.2 2,502.7 1,129.9 844.4 528.4 16.4 2.1 243.6 47.3 317.0 231.3

December 3,186.6 31.8 2,537.5 1,198.3 803.9 535.3 14.1 2.9 229.9 47.3 323.1 231.3

2015 January 3,212.9 33.8 2,561.3 1,222.9 773.2 551.1 14.1 2.8 237.0 47.3 330.7 233.1

February 3,223.9 30.4 2,554.0 1,230.3 766.3 557.4 14.6 2.9 236.7 47.3 337.9 233.1

March 3,250.3 29.4 2,574.5 1,266.2 748.5 559.8 14.6 2.8 236.7 47.3 344.9 233.1

April 3,256.7 34.1 2,575.7 1,268.9 745.7 561.1 14.8 2.6 229.3 47.3 352.8 263.9

May 3,262.2 33.9 2,573.6 1,277.8 736.5 559.3 14.4 2.8 229.2 47.3 360.9 263.9

June 3,269.6 55.6 2,574.6 1,291.1 730.8 552.7 13.1 2.8 226.5 47.3 349.7 263.9

Source: CBK (2015)


| 89

Table 5.1. ODC deposits - euro deposits


Description

Total deposits in euro

Government Finanncial corporations Non financial corporations Other domestic sectors Nonresidents

Other depository

corporations

Other financial

intermedi-aries

Insurance company-

es

Pension funds

Financial auxilliaries

Public nonfinancial

corporati-ons

Other nonfinancial corporations

Households NPISH

2001 492.3 __ __ __ __ __ . __ 165.2 __ 165.2 313.1 313.1 __ 13.9

2002 427.2 __ __ __ __ __ . __ 183.6 __ 183.6 226.1 226.1 __ 17.5

2003 515.8 __ 1.8 1.8 __ __ . __ 226.1 __ 226.1 267.9 267.9 __ 20.0

2004 674.9 1.3 25.6 3.7 3.5 15.5 . 2.9 275.3 173.5 101.8 360.3 350.7 9.6 12.3

2005 815.3 2.9 35.4 8.1 5.8 18.8 . 2.8 319.0 211.3 107.7 440.7 428.7 12.0 17.3

2006 890.4 7.0 28.1 0.1 2.4 24.7 0.4 0.5 337.8 217.4 120.5 499.2 486.1 13.1 18.2

2007 1,092.0 4.1 39.1 3.1 5.6 28.3 0.4 1.7 386.2 215.5 170.7 647.0 631.9 15.2 15.6

2008 1,366.9 1.4 62.9 5.0 6.5 31.5 19.4 0.4 479.7 263.8 215.9 785.0 774.5 10.5 37.9

2009 1,640.1 165.0 78.2 6.1 5.9 43.1 22.6 0.4 371.5 121.6 249.9 962.2 948.8 13.4 63.2

2010 1,831.1 11.7 105.0 7.3 7.9 47.6 41.6 0.6 414.9 122.3 292.6 1,220.1 1,206.1 14.0 79.4

2011 1,982.4 2.7 117.5 9.9 6.8 57.2 43.1 0.5 406.6 128.5 278.1 1,395.6 1,373.4 22.2 60.0

2012 2,162.8 0.7 120.0 3.8 6.2 64.3 45.3 0.4 401.7 75.6 326.1 1,558.6 1,535.4 23.2 81.7

2013 September 2,216.4 1.4 83.7 1.9 8.1 67.5 5.8 0.4 419.4 87.4 332.1 1,622.8 1,594.7 28.1 89.0

October 2,225.4 1.4 85.3 3.1 8.4 67.6 5.8 0.4 425.4 89.9 335.5 1,628.6 1,600.4 28.3 84.7

November 2,235.7 2.0 90.1 3.6 8.6 69.1 8.5 0.4 411.2 84.6 326.6 1,648.9 1,623.5 25.4 83.5

December 2,314.1 1.8 88.2 2.5 7.4 72.3 5.7 0.3 455.6 72.1 383.5 1,685.1 1,658.7 26.4 83.4

2014 January 2,312.9 1.7 96.1 6.3 13.7 70.3 5.4 0.5 397.5 59.9 337.5 1,710.8 1,681.4 29.4 106.8

February 2,303.9 1.8 107.0 5.8 12.9 71.7 16.1 0.4 381.6 58.4 323.2 1,711.5 1,682.5 28.9 102.1

March 2,298.3 1.9 110.7 6.4 11.9 75.1 16.8 0.4 376.9 52.0 324.9 1,712.5 1,675.9 36.7 96.3

April 2,288.9 1.8 111.4 5.1 12.0 76.3 17.6 0.4 379.6 68.7 311.0 1,705.0 1,674.6 30.3 91.1

May 2,280.8 2.0 112.9 4.9 12.1 77.1 18.5 0.3 383.9 68.2 315.7 1,695.2 1,667.0 28.2 86.7

June 2,285.9 1.9 112.9 3.6 12.3 77.3 19.3 0.3 382.8 69.2 313.6 1,703.7 1,676.2 27.5 84.7

July 2,339.8 1.9 114.0 7.0 11.0 76.1 19.7 0.3 407.4 70.0 337.5 1,719.8 1,691.4 28.4 96.8

August 2,381.2 2.0 117.7 5.6 12.4 78.2 21.1 0.4 428.8 67.1 361.7 1,741.6 1,710.7 30.9 91.2

September 2,389.5 4.6 117.2 3.9 11.7 79.5 21.8 0.3 433.2 66.4 366.8 1,748.9 1,718.9 29.9 85.7

October 2,394.6 7.2 118.5 4.0 13.3 79.0 21.8 0.5 423.9 68.0 356.0 1,758.5 1,726.9 31.6 86.5

November 2,390.9 8.5 114.3 2.3 5.4 83.9 22.1 0.5 420.9 64.9 356.0 1,761.3 1,730.6 30.7 85.9

December 2,426.3 8.8 104.6 2.8 5.1 79.3 17.1 0.3 449.7 61.8 387.9 1,781.1 1,750.6 30.6 82.1

2015 January 2,440.6 9.1 99.4 3.0 5.0 72.9 16.7 1.8 423.2 57.1 366.1 1,822.0 1,792.2 29.8 87.0

February 2,449.7 9.2 98.2 4.4 4.5 70.9 16.0 2.3 421.6 56.8 364.8 1,836.7 1,807.7 29.0 83.9

March 2,462.5 10.1 97.1 5.3 2.9 71.5 15.7 1.7 418.0 57.4 360.6 1,839.9 1,811.2 28.7 97.4

April 2,468.2 10.0 94.9 4.6 3.8 70.8 14.0 1.7 432.8 54.5 378.3 1,837.4 1,810.3 27.1 93.2

May 2,465.0 10.2 89.5 3.0 4.3 66.9 13.6 1.7 438.8 51.3 387.5 1,836.6 1,809.2 27.4 90.0

June 2,460.3 10.5 87.7 3.9 3.4 65.3 13.5 1.7 443.0 47.6 395.3 1,834.3 1,807.8 25.6 84.9

Source: CBK (2015)


90 |

Table 5.2. Non euro deposits


Description

Non-euro deposits

Finanncial

corporations

of which:

Nonfinancial corporations

Other domestic sectors Non residents

CBK Other depository corporatio

ns

Other financial

intermediaries

Insurance companies

Public nonfinancial corporations

Other nonfan-ancial

corporations

Households NPISH

Transfe-rable

deposits

Saving acco-unt

Other deposits

2005 29.4 … __ … … … 2.8 __ 2.8 26.0 25.7 10.8 __ 14.9 0.3 0.5

2006 34.3 … __ … … … 3.7 0.3 3.5 29.8 29.6 12.4 __ 17.2 0.2 0.5

2007 53.3 0.5 __ … 0.1 0.4 8.1 1.5 6.6 44.3 44.2 16.2 __ 28.0 0.1 0.4

2008 81.9 0.9 __ … … 0.9 11.6 0.1 11.5 68.4 68.2 22.9 __ 45.2 0.3 1.0

2009 112.1 2.1 __ 1.2 … 0.9 18.3 1.3 17.0 91.1 90.9 29.7 __ 61.1 0.2 0.7

2010 113.8 3.1 __ 2.9 __ __ 13.7 4.3 9.4 93.8 93.3 33.1 25.9 34.3 0.5 3.1

2011 131.5 0.3 __ 0.3 __ __ 9.8 0.1 9.7 117.5 117.0 46.5 31.7 38.9 0.4 3.8

2012 120.9 1.6 __ 1.2 0.2 __ 9.6 __ 9.6 104.9 104.7 45.7 27.0 32.0 0.2 4.8

2013 August 128.9 0.3 __ __ 0.2 __ 9.8 __ 9.8 113.9 113.7 56.9 28.9 27.9 0.3 4.8

September 129.7 0.4 __ __ 0.1 __ 12.4 __ 12.4 112.1 111.8 55.8 28.8 27.2 0.3 4.8

October 131.7 0.4 __ __ 0.1 __ 13.8 __ 13.8 112.4 111.6 54.5 29.7 27.4 0.8 5.1

November 126.6 0.6 __ __ 0.3 __ 8.7 __ 8.7 112.2 111.4 55.2 29.0 27.2 0.8 5.0

December 136.9 0.7 __ __ 0.4 __ 14.3 __ 14.3 116.7 116.2 59.6 29.6 27.0 0.5 5.2

2014 January 136.4 0.1 __ __ 0.1 __ 12.6 __ 12.6 118.4 118.0 60.4 30.7 26.9 0.4 5.3

February 135.0 0.4 __ __ 0.1 __ 11.9 __ 11.9 117.3 116.7 60.9 30.4 25.4 0.6 5.4

March 138.5 0.2 __ __ 0.1 __ 15.3 __ 15.3 117.4 115.9 61.5 30.7 23.7 1.6 5.6

April 141.2 0.2 __ __ 0.1 __ 15.6 __ 15.6 119.5 118.4 64.9 30.3 23.2 1.2 5.9

May 138.8 0.4 __ __ 0.3 __ 11.7 __ 11.7 121.0 120.5 66.4 32.1 22.0 0.4 5.7

June 138.3 0.2 __ __ 0.1 __ 10.4 __ 10.4 121.4 120.8 68.2 31.6 21.0 0.6 6.3

July 141.7 0.5 __ __ 0.5 __ 10.1 __ 10.1 123.9 123.0 70.8 31.4 20.8 0.8 7.2

August 137.6 0.2 __ __ 0.2 __ 9.5 __ 9.5 121.4 120.9 70.0 31.7 19.2 0.5 6.6

September 132.0 0.1 __ __ 0.1 __ 9.4 __ 9.4 115.5 115.1 68.3 29.3 17.6 0.3 7.0

October 123.0 0.1 __ __ 0.1 __ 8.7 __ 8.7 108.0 107.5 65.6 26.6 15.4 0.4 6.3

November 113.8 0.1 __ __ 0.1 __ 8.7 __ 8.7 98.9 98.3 61.5 23.0 13.8 0.6 6.0

December 113.1 0.3 __ __ 0.3 __ 8.5 __ 8.5 97.8 97.3 63.2 21.5 12.6 0.6 6.5

2015 January 109.2 0.2 __ __ 0.1 __ 10.9 __ 10.9 92.0 91.5 58.9 21.6 11.0 0.7 6.2

February 108.4 0.1 __ … 0.1 … 12.5 __ 12.5 88.9 88.1 57.8 20.1 10.3 0.8 6.9

March 117.1 0.1 __ … … … 12.0 __ 12.0 94.7 94.0 63.7 20.9 9.4 0.7 7.9

April 111.8 0.0 __ … … __ 10.0 __ 10.0 92.7 92.1 62.8 20.4 8.9 0.6 9.0

May 111.1 0.1 __ __ … __ 8.5 __ 8.5 95.2 94.4 65.1 20.4 8.9 0.8 7.4

June 117.9 0.1 __ __ … __ 12.3 __ 12.3 97.9 96.8 68.0 20.1 8.6 1.1 7.6

Source: CBK (2015)


| 91

Table 6.1. Deposits at ODC, nonfinancial corporations, euro deposits


Description

Nonfinancial corporations

Public nonfinancial corporations Other nonfinancial corporations

Transfera-ble

deposits

Saving account

Other deposits

of which: Transfer-

able deposits

Saving account

Other deposits

of which:

Over 1 month and up to 3 months

Over 3 months and up to 6 months

Over2 years

Over 1 month and up to 3 months

Over 6 months and up to 1 year

Over 1 year and up to 2 years

Over2 years

2001 165.2 __ __ … __ 0.0 __ __ 165.2 133.9 … 31.3 0.0 __ __ __

2002 183.6 __ __ … __ 0.0 __ __ 183.6 159.7 … 23.9 0.0 __ __ __

2003 226.1 __ __ … __ 0.0 __ __ 226.1 139.0 … 87.1 0.0 __ __ __

2004 275.3 173.5 24.2 … 149.3 34.0 __ … 101.8 78.2 … 23.6 15.1 0.2 2.1 __

2005 319.0 211.3 29.9 … 181.3 36.6 __ … 107.7 74.4 … 33.4 14.6 5.1 0.7 __

2006 337.8 217.4 24.0 … 193.3 39.3 __ … 120.5 93.6 … 26.9 13.0 1.7 3.0 __

2007 386.2 215.5 27.1 … 188.4 126.9 __ … 170.7 128.4 … 42.3 28.4 3.7 2.0 __

2008 479.7 263.8 13.7 … 250.1 69.0 __ … 215.9 170.2 … 45.8 23.4 2.0 7.0 __

2009 371.5 121.6 47.6 … 73.9 11.4 52.3 … 249.9 178.0 … 71.9 42.3 … 5.3 10.9

2010 414.9 122.3 79.5 … 42.8 24.3 3.1 12.6 292.6 212.6 16.9 63.1 24.3 17.1 8.8 9.7

2011 406.6 128.5 67.8 0.0 60.8 29.8 17.2 11.6 278.1 201.1 14.0 62.9 17.5 18.5 7.3 8.0

2012 401.7 75.6 13.8 0.0 61.8 46.9 0.1 12.0 326.1 249.6 9.2 67.3 16.0 27.4 6.5 7.8

2013 September 419.4 87.4 14.4 1.2 71.8 50.1 5.0 12.1 332.1 259.6 17.1 55.4 12.6 27.1 6.0 7.0

October 425.4 89.9 13.5 0.6 75.7 54.2 5.0 12.0 335.5 271.2 15.2 49.1 5.6 27.8 6.4 7.2

November 411.2 84.6 18.8 0.2 65.7 44.3 5.0 12.0 326.6 250.7 15.8 60.1 7.7 37.4 6.3 6.9

December 455.6 72.1 16.4 0.1 55.7 35.3 5.0 12.0 383.5 286.4 17.0 80.1 9.9 54.7 7.1 5.9

2014 January 397.5 59.9 11.8 0.7 47.4 27.7 5.0 12.2 337.5 246.7 17.4 73.5 8.5 49.7 6.9 6.0

February 381.6 58.4 10.7 0.2 47.5 10.9 22.0 12.2 323.2 243.4 7.0 72.8 9.3 48.5 6.9 6.0

March 376.9 52.0 9.5 . 42.5 1.5 17.0 12.3 324.9 246.6 6.2 72.0 4.9 48.7 5.5 6.7

April 379.6 68.7 11.5 . 57.2 1.5 27.0 12.3 311.0 238.5 7.7 64.8 4.4 48.2 4.7 7.0

May 383.9 68.2 10.2 . 58.1 1.9 27.0 12.3 315.7 246.2 8.9 60.6 4.2 44.4 4.7 6.8

June 382.8 69.2 11.0 . 58.2 0.4 29.0 12.2 313.6 246.5 6.7 60.4 4.6 44.0 4.8 6.6

July 407.4 70.0 12.1 . 57.9 0.0 19.0 12.2 337.5 266.0 6.9 64.6 4.8 47.7 4.6 7.1

August 428.8 67.1 27.6 . 39.4 10.0 2.0 12.2 361.7 289.1 8.2 64.4 4.7 46.8 4.7 7.8

September 433.2 66.4 12.5 . 53.9 10.0 2.0 12.2 366.8 292.3 11.0 63.5 4.3 46.0 4.9 7.9

October 423.9 68.0 14.0 . 53.9 10.1 2.0 12.2 356.0 283.6 9.1 63.3 4.6 45.7 4.9 7.8

November 420.9 64.9 11.3 . 53.6 10.1 2.0 12.2 356.0 288.0 8.9 59.1 4.0 42.4 4.8 7.7

December 449.7 61.8 10.2 . 51.6 5.0 3.0 12.2 387.9 330.2 8.7 49.0 4.0 31.7 5.1 7.8

2015 January 423.2 57.1 10.4 . 46.7 0.0 3.0 12.2 366.1 308.8 7.9 49.4 4.1 32.1 5.1 7.8

February 421.6 56.8 10.0 . 46.7 0.1 3.0 12.2 364.8 301.2 8.1 55.5 9.3 33.0 4.9 7.9

March 418.0 57.4 19.6 . 37.8 0.2 3.0 12.2 360.6 294.4 7.5 58.6 11.0 34.3 4.0 8.8

April 432.8 54.5 17.7 . 36.8 0.2 3.0 12.2 378.3 307.5 8.0 62.8 11.2 34.4 3.8 13.0

May 438.8 51.3 14.5 . 36.8 0.2 3.0 12.2 387.5 315.2 8.0 64.2 12.7 33.1 4.1 13.3

June 443.0 47.6 10.9 . 36.7 0.1 … 12.2 395.3 323.3 7.6 64.5 14.3 31.7 5.4 13.1

Source: CBK (2015)


92 |

Table 6.2. Deposits at ODC - households and NPISH, euro deposits


Description

Other domestic sectors

Households NPISH


Saving account

Other deposits

of which:


Saving account

Other deposits

Up to 1 month

Over 3 months and up to 6 months

Over 3months and up to1 year

Over 1 year and up to 2 years

Over 2 years

2001 313.1 313.1 219.2 … 93.9 __ __ 93.9 __ __ __ __ … __

2002 226.1 226.1 121.7 … 104.4 __ __ 104.4 __ __ __ __ … __

2003 267.9 267.9 134.4 … 133.5 __ __ 133.5 __ __ __ __ … __

2004 360.3 350.7 136.9 … 213.8 63.8 __ 91.8 14.2 1.9 9.6 8.9 … 0.7

2005 440.7 428.7 144.7 … 284.0 87.2 __ 109.3 26.5 19.3 12.0 10.4 … 1.6

2006 499.2 486.1 143.8 … 342.3 122.2 __ 127.9 26.5 37.1 13.1 7.6 … 5.5

2007 647.0 631.9 170.6 … 461.3 156.2 __ 141.6 74.6 50.3 15.2 11.9 … 3.3

2008 785.0 774.5 163.3 … 611.2 189.6 __ 234.6 64.8 61.6 10.5 7.7 … 2.8

2009 962.2 948.8 208.0 … 740.8 242.4 315.9 … 63.2 80.5 13.4 11.1 … 2.3

2010 1,220.1 1,206.1 270.4 274.5 661.2 30.0 76.1 347.8 61.1 108.3 14.0 13.0 0.5 0.5

2011 1,395.6 1,373.4 314.4 276.2 782.8 24.8 67.0 257.3 261.5 147.6 22.2 18.3 0.5 3.3

2012 1,558.6 1,535.4 361.5 283.2 890.8 25.2 58.4 337.8 260.5 177.6 23.2 19.7 0.0 3.4

2013 September 1,622.8 1,594.7 395.1 323.9 875.7 9.3 34.2 467.3 173.4 174.0 28.1 23.7 0.2 4.2

October 1,628.6 1,600.4 393.9 326.1 880.3 6.9 31.1 464.9 179.5 176.6 28.3 24.2 0.3 3.8

November 1,648.9 1,623.5 417.3 332.1 874.2 11.1 27.7 459.3 182.3 178.1 25.4 21.4 0.2 3.8

December 1,685.1 1,658.7 447.0 342.5 869.2 8.7 24.9 455.0 187.1 177.1 26.4 22.3 0.2 3.8

2014 January 1,710.8 1,681.4 455.8 357.9 867.7 6.3 24.0 451.4 192.7 176.0 29.4 25.3 0.1 4.0

February 1,711.5 1,682.5 466.6 365.3 850.6 6.4 23.3 440.0 191.5 173.8 28.9 25.1 0.1 3.8

March 1,712.5 1,675.9 474.6 372.3 829.0 4.7 19.2 434.1 185.1 166.9 36.7 32.8 0.1 3.8

April 1,705.0 1,674.6 496.9 377.9 799.9 3.8 11.6 429.1 185.9 164.2 30.3 26.7 0.1 3.5

May 1,695.2 1,667.0 505.7 384.0 777.2 3.6 11.0 413.0 180.3 164.9 28.2 24.0 0.1 4.1

June 1,703.7 1,676.2 534.5 389.6 752.0 3.3 10.3 395.0 175.5 164.9 27.5 23.3 0.2 4.0

July 1,719.8 1,691.4 568.6 401.1 721.7 2.8 9.2 365.3 174.7 166.5 28.4 25.8 0.2 2.5

August 1,741.6 1,710.7 598.6 421.6 690.5 4.1 8.6 333.7 172.4 168.5 30.9 28.3 0.1 2.5

September 1,748.9 1,718.9 615.6 436.2 667.1 3.3 8.3 310.5 172.6 169.5 29.9 27.9 0.1 2.0

October 1,758.5 1,726.9 634.1 451.0 641.8 3.3 7.8 290.6 166.6 170.5 31.6 29.5 0.1 2.0

November 1,761.3 1,730.6 646.7 461.0 622.9 3.2 6.9 277.4 161.8 170.5 30.7 28.7 0.1 2.0

December 1,781.1 1,750.6 679.9 470.2 600.5 3.4 6.0 259.7 155.2 172.2 30.6 28.5 0.1 2.0

2015 January 1,822.0 1,792.2 726.1 486.6 579.5 3.8 5.3 240.5 153.1 173.7 29.8 27.7 0.1 2.0

February 1,836.7 1,807.7 743.1 495.7 568.9 3.9 6.2 230.2 140.3 185.2 29.0 27.2 0.1 1.8

March 1,839.9 1,811.2 755.0 497.9 558.2 3.9 4.8 216.9 142.3 187.8 28.7 26.9 0.1 1.8

April 1,837.4 1,810.3 757.6 499.4 553.2 4.6 6.5 214.2 135.3 189.7 27.1 25.9 0.1 1.1

May 1,836.6 1,809.2 765.4 497.5 546.3 4.5 5.9 206.3 136.2 190.3 27.4 26.8 0.1 0.5

June 1,834.3 1,807.8 773.8 491.4 542.6 5.2 5.7 158.9 177.0 192.6 26.5 25.9 0.1 0.6

Source: CBK (2015)


| 93

Table 6.3. ODC loans - main sectors


Description

Total

Financial corporatio

ns of which:

Nonfinancial corporations of which:

Other domestic

corporations

of which:

Nonresi-dents

Loans in Non Euro Currency Other

financial

intermediaries

Insurance companies

Public nonfinancial corporations

Other nonfinancial corporations

Households

Up to 1

year

Over 1

year

Up to 1 year

Over 1 year

2001 25.9 __ __ __ 25.9 __ 25.9 24.6 1.3 __ __ __ 0.0 __ __

2002 86.5 __ __ __ 80.8 __ 80.8 67.3 13.5 5.7 5.7 1.4 4.3 __ __

2003 232.8 __ __ __ 193.7 0.2 193.5 124.7 68.9 39.0 39.0 11.4 27.7 __ __

2004 373.7 __ __ __ 289.9 … 289.9 111.5 178.5 83.7 83.7 15.9 67.8 __ __

2005 513.9 __ __ __ 387.9 … 387.9 117.9 269.9 126.0 126.0 19.5 106.4 __ __

2006 636.6 __ __ __ 490.5 … 490.5 128.7 361.8 146.1 146.1 19.7 126.4 __ __

2007 892.1 __ __ __ 691.5 0.2 691.3 174.0 517.3 200.6 200.6 24.0 176.6 __ __

2008 1,183.4 0.6 __ 0.6 901.8 0.1 901.7 191.0 710.7 281.0 281.0 20.9 260.1 __ __

2009 1,289.0 2.3 1.2 1.1 943.2 0.3 942.9 215.7 727.2 343.5 343.5 27.0 316.6 __ __

2010 1,458.7 5.7 2.6 3.0 1,014.5 6.3 1,008.3 259.4 748.9 434.3 434.2 26.5 407.6 1.6 2.5

December 1,698.1 17.3 15.6 1.7 1,128.6 1.5 1,127.0 298.8 828.2 512.4 510.9 44.0 466.9 32.5 7.3

December 1,763.4 19.8 16.3 3.5 1,171.2 1.4 1,169.8 313.4 856.4 543.0 542.6 52.2 490.4 22.5 6.9

2013 September 1,798.0 18.8 16.2 2.6 1,195.4 0.3 1,195.1 369.8 825.4 557.3 556.5 62.4 494.1 20.1 6.3

October 1,798.8 18.6 16.8 1.8 1,187.2 0.3 1,186.9 368.1 818.8 566.9 566.5 64.1 502.4 19.8 6.4

November 1,803.2 18.9 17.0 1.9 1,193.7 0.3 1,193.4 381.9 811.5 564.6 563.9 63.5 500.5 19.8 6.3

December 1,805.8 20.4 17.3 3.1 1,194.7 0.2 1,194.5 378.0 816.5 564.7 563.9 65.4 498.4 19.9 6.1

2014 January 1,794.5 19.1 17.0 2.1 1,189.7 0.2 1,189.5 379.4 810.1 560.5 559.8 65.6 494.2 19.1 6.0

February 1,794.3 19.1 16.7 2.4 1,190.2 0.2 1,190.0 366.5 823.6 560.0 559.3 60.1 499.3 19.1 5.9

March 1,825.9 20.0 16.8 3.2 1,215.1 0.2 1,214.9 388.3 826.6 565.9 564.8 65.8 499.0 19.2 5.7

April 1,839.7 18.8 16.7 2.0 1,224.6 0.2 1,224.4 395.8 828.6 571.8 571.2 66.5 504.7 18.7 5.8

May 1,856.8 19.1 16.9 2.1 1,229.2 0.2 1,229.1 397.4 831.6 583.8 583.4 68.5 514.9 18.7 5.9

June 1,889.9 20.2 17.2 3.0 1,251.0 0.2 1,250.9 399.4 851.4 594.0 593.2 69.3 523.9 18.8 5.9

July 1,874.3 19.0 17.2 1.8 1,241.2 0.2 1,241.0 396.1 844.9 602.0 601.5 70.3 531.2 5.9 6.2

August 1,848.2 19.2 17.1 0.8 1,212.4 0.2 1,212.2 375.8 836.4 604.4 604.0 69.5 534.5 5.9 6.2

September 1,855.0 7.8 5.1 2.7 1,225.3 0.2 1,225.2 386.6 838.5 609.6 609.5 70.3 539.1 5.9 6.4

October 1,854.0 7.5 5.1 2.4 1,236.6 0.2 1,236.4 368.1 868.4 603.2 603.1 48.9 554.2 0.4 6.2

November 1,860.8 7.6 5.7 1.9 1,236.3 0.2 1,236.1 377.6 858.6 610.4 610.2 50.2 560.0 0.5 6.1

December 1,882.3 7.1 5.8 1.3 1,233.4 0.6 1,232.7 367.0 865.7 635.4 635.3 69.6 565.7 0.5 6.0

2015 January 1,863.1 7.2 7.0 0.2 1,230.7 0.2 1,230.5 359.7 870.9 618.7 618.5 49.8 568.7 0.4 6.1

February 1,874.9 8.1 7.0 1.0 1,242.6 0.3

1,242.3 378.8 863.5 617.7 617.4 33.6 568.5 0.4 6.1

March 1,903.5 9.2 7.4 1.8 1,262.0 0.7 1,261.4 349.9 911.5 625.7 625.6 36.1 575.0 0.4 6.2

April 1,936.0 8.8 7.7 1.1 1,285.1 0.2 1,284.9 386.8 898.1 635.9 635.6 40.3 578.6 0.4 6.1

May 1,957.0 9.1 8.0 1.1 1,294.7 0.3 1,294.4 377.0 917.4 646.8 646.7 40.7 548.4 0.4 6.4

June 2004.8 9.0 7.4 1.5 1328.6 0.6 1328.0 366.5 961.5 660.9 660.8 41.2 563.4 0.4 6.3

Source: CBK (2015)


94 |

Table 6.4. ODC loans - main economic sectors, corporates


Description

Total

Agriculture Industry, energy and construction Services

Up to 1 year

Over 1 year

Up to 1 year

Over 1 year

Up to 1 year

Over 1 year

2001 25.9 … … __ 3.8 3.8 … 22.2 22.2 …

2002 86.5 1.5 1.5 __ 13.6 13.6 … 71.4 71.4 …

2003 232.8 4.7 3.9 0.8 22.2 12.6 9.7 205.8 119.7 86.1

2004 289.9 7.9 3.9 4.1 47.8 22.5 25.3 234.2 89.5 144.8

2005 387.9 12.5 4.1 8.4 74.2 24.5 49.7 301.1 92.4 208.8

2006 490.5 16.4 3.4 13.0 97.7 28.0 69.7 376.4 120.6 255.8

2007 691.5 29.0 4.1 24.9 144.5 32.8 111.7 518.0 149.5 368.5

2008 902.4 37.4 4.1 33.3 160.2 28.9 131.2 704.8 126.4 578.4

2009 945.5 38.2 3.8 34.4 236.7 54.8 181.9 670.5 113.2 557.3

2010 1,022.8 38.2 1.7 36.5 269.3 77.1 192.2 715.3 188.5 526.8

2011 1,149.5 40.5 2.7 37.8 284.7 82.3 202.4 824.4 220.5 603.8

2012 1,194.2 43.6 3.0 40.6 290.4 74.1 216.2 860.2 232.3 627.9

2013 August 1,214.1 56.5 4.1 52.4 291.4 95.5 195.9 866.3 258.3 608.0

September 1,216.5 55.4 3.7 51.7 295.1 96.4 198.7 866.0 265.9 600.1

October 1,208.0 46.8 3.2 43.7 291.9 94.1 197.8 869.2 276.3 592.9

November 1,214.7 46.2 3.2 43.0 292.1 97.6 194.5 876.4 286.5 589.9

December 1,217.4 45.8 3.3 42.5 291.4 95.8 195.6 880.2 286.2 594.0

2014 January 1,217.4 45.8 3.3 42.5 291.4 95.8 195.6 880.2 286.2 594.0

February 1,211.5 45.3 3.3 42.0 286.4 94.5 191.9 879.8 289.4 590.4

March 1,237.1 45.3 3.4 41.9 297.9 95.4 202.5 893.9 296.8 597.1

April 1,245.4 45.3 4.3 41.1 300.6 98.2 202.4 899.5 298.5 601.0

May 1,250.4 45.3 4.3 41.0 303.4 100.0 203.4 901.7 297.0 604.7

June 1,273.3 45.5 4.5 41.0 304.8 103.4 201.5 923.0 294.9 628.0

July 1,262.5 45.3 3.4 41.9 301.3 89.3 212.1 915.9 270.1 645.8

August 1,233.9 45.0 4.7 40.3 294.3 97.2 197.1 894.6 277.2 617.4

September 1,235.6 48.9 4.9 44.0 293.7 97.2 196.6 892.9 288.0 605.0

October 1,246.3 48.2 4.3 43.9 295.3 97.0 198.4 902.8 282.5 620.3

November 1,246.1 49.4 5.0 44.4 295.0 100.1 194.9 901.7 293.2 608.5

December 1,242.8 49.4 4.0 45.5 290.0 85.8 204.2 903.4 281.8 621.5

2015 January 1,240.3 48.3 4.0 44.4 293.0 90.8 202.2 899.0 281.8 617.2

February

1,253.1

48.4

4.1

44.3

295.1

99.8

195.3

909.6

293.1

616.5

March

1,273.7

49.6

3.6

46.0

299.4

98.3

201.1

924.7

268.9

655.8

April

1,296.3

49.8

3.5

46.2

305.6

96.6

190.1

940.9

261.9

628.9

May 1,306.4 50.1 3.3 46.8 304.3 89.0 198.0 952.0 261.0 633.9

June 1,340.1 51.0 3.0 48.0 311.3 38.5 130.0 977.8 255.8 668.2

Source: CBK (2015)


| 95

Table 7.1. ODC effective interest rate - deposit interest rates

(New contracts, unless otherwise indicated)

Description

Deposit

rates

Nonfinancial corporations Households

Transfer

able

deposits

Other deposits Savin

g

depos

its

Transfer

able

deposits

Other deposits Saving

deposi

ts Less than 250.000 euro More than 250.000

euro

Up to

1

mont

h

Over

1

mont

h and

up to

3

mont

hs

Over

3

mont

hs

and

up 6

mont

hs

Over

6

mont

hs

and

up 1

year

Ove

r 1

year

and

up 2

year

s

Over

2year

s Up to

1

month

Over 1

month

and up

to 3

months

Over 6

months

and up

1 year

Over

2years

Up to

1

month

Over 1

month

and up

to 3

months

Over 6

months

and up

1 year

2005 December 3.1 0.3 2.1 2.4 3.4 * 2.9 * * 1.7 0.0 1.8 2.2 * 3.3 3.9 4.0 1.7

2006 December 3.1 0.4 2.1 2.9 4.3 * 3.1 * * 1.5 0.0 1.9 2.3 * 3.4 4.2 4.5 1.7

2007 December 4.0 0.5 2.7 2.9 4.4 * 4.3 4.1 * 2.4 0.0 2.6 2.7 * 3.6 4.7 5.3 2.3

2008 December 4.4 0.5 3.1 4.0 5.3 * 3.6 4.9 * 2.9 0.1 3.2 4.6 * 4.5 5.0 3.9 2.7

2009 December 4.0 0.7 3.4 3.4 5.0 * 3.9 4.9 * 2.6 0.3 3.1 3.3 * 4.4 5.0 5.5 2.5

2010 December 3.4 0.6 2.4 3.1 5.0 5.1 * 3.7 * 2.1 0.6 2.6 2.6 3.1 4.5 4.8 5.1 2.2

2011 December 3.6 0.9 2.2 2.9 4.9 5.1 2.6 3.9 5.2 2.2 0.5 2.5 2.5 2.9 4.2 4.6 5.4 2.1

2012 December 3.7 0.8 * 2.8 * * 2.7 4.0 4.8 2.1 0.5 2.3 2.5 2.8 4.2 4.5 4.8 2.1

2013 May 3.5 0.7 * * 4.4 * 2.3 3.7 3.8 2.0 0.6 2.2 2.1 2.7 3.8 4.5 5.0 1.6

June 3.5 0.9 * * 3.6 * * * * 2.0 0.6 2.0 2.7 2.5 3.9 4.4 4.9 1.6

July 3.6 0.7 * 2.5 * * * * * 2.0 0.8 2.3 2.2 2.5 3.7 4.5 5.0 1.6

August 3.4 0.7 * * * * 1.7 * 4.8 2.0 0.4 2.3 2.1 2.6 3.7 4.3 4.6 1.6

September 3.4 0.6 0.6 * * 4.2 * 2.6 * 2.0 0.5 2.1 2.5 2.5 3.6 4.4 4.9 1.6

October 3.3 0.6 1.3 2.3 * * 0.0 * * 2.0 0.4 2.0 2.1 2.3 3.5 4.3 4.8 1.6

November 3.2 0.4 0.5 0.6 * * * * * 1.8 0.4 1.8 2.1 2.3 3.4 4.1 4.7 1.6

December 2.4 0.5 0.8 * 0.5 * * * * 1.7 0.5 1.7 1.7 2.0 2.9 3.4 4.0 1.7

January 2.7 0.1 0.8 * 2.4 3.7 * * * * 0.3 1.6 1.7 1.9 2.8 3.3 3.8 1.4

February 2.0 0.3 0.8 0.9 1.5 * * * * * 0.3 0.9 1.3 1.8 2.1 2.7 * 1.1

March 1.7 0.4 0.5 0.5 * * * * * * 0.2 0.8 * 1.5 1.4 2.8 * 0.8

April 0.6 0.2 0.6 0.5 0.4 * * * * * 0.1 0.4 0.4 0.3 0.7 0.8 1.4 0.7

May 0.6 0.2 0.6 0.6 0.7 0.5 0.1 * * 0.6 0.1 0.4 0.3 0.3 0.7 0.8 1.5 0.7

June 0.6 0.2 0.4 0.6 * 0.1 0.0 * * 0.6 0.1 0.3 0.2 0.3 0.6 0.9 1.4 0.5

July 0.7 0.1 0.2 * * * * * 0.1 0.6 0.1 0.3 0.4 0.3 0.6 1.1 1.6 0.7

August 0.9 0.2 * 0.5 * 2.0 … * * 0.6 0.1 0.3 0.4 0.3 0.8 1.3 1.8 0.5

September 1.0 0.2 * 0.5 0.8 * … * * 0.6 … 0.3 0.4 0.2 0.8 1.4 1.9 0.5

October 0.5 0.1 * * 0.9 * 0.1 * * 0.4 … 0.3 0.4 0.2 0.6 0.6 * 0.5

November 0.6 0.2 1.0 * 0.9 * * * 0.7 0.5 0.02 0.2 0.4 0.2 0.7 0.3 1.6 0.4

2014 December 1.1 0.1 0.2 * * * * * 1.9 0.7 0.01 0.2 0.5 0.3 0.7 0.9 2.0 0.6

2015 January 0.8 0.1 0.1 * 0.1 * * * 0.6 0.6 0.01 0.2 0.6 0.3 0.6 1.1 1.9 0.4

February 0.8 0.1 0.2 1.3 1.3 * * * 0.1 0.1 0.01 0.3 0.5 0.3 0.6 1.0 1.6 0.4

March 0.8 0.1 0.2 0.0 0.7 * * * 1.1 0.1 0.01 0.4 0.5 0.2 0.6 0.6 1.3 0.3

April 0.8 0.1 0.3 1.6 0.5 * * * 1.2 0.1 0.01 0.2 0.7 0.2 0.5 0.6 1.8 0.3

May 0.9 0.1 0.7 1.5 0.1 * * * 0.9 0.1 0.01 0.2 0.5 0.3 0.6 1.0 1.8 0.3

June 0.8 0.1 1.0 1.4 * * * * * 0.1 0.01 0.4 0.7 0.3 0.5 0.9 1.7 0.3

Source: CBK (2015)


96 |

Table 7.2. ODC effective interest rate - loan interest rates

(New contracts, unless otherwise indicated)

Description

Interest rate

on loans /

1

Nonfinancial corporations (Loans) Households (Loans)

Investment business loans

Other business loans

Overdrafts (outstandin

g amounts) 2/

Credit lines (outstandin

g amounts)

Loans with favourable

conditions /4

Overdraft

s (outstanding

amounts)

2/

Loans with favourable

conditions /4

Consumer

loans

Mortgage loans / 3

Up to 1 year

Over 1

year and

up to 5

years

Over 5

years

Up to 1 year

Over 1 year

and up to

5 years

Over 5

years

Up to 1

year

Over 1

year and

up to 5

years

Over 5

years

Cash over loans

Other loans

Cash over loans

Other loans

2005 December 14.5 17.3 13.3 13.

3 15.2 14.4 … 15.1 11.5 … * * … * 11.5 * * *

2006 December 14.7 * 14.5 14.

5 13.6 15.2 … 15.7 12.4 … * * … * 12.4 * 13.4 *

2007 December 14.1 * 13.8 13.

8 * 14.6 … 15.1 13.7 … * * … * 13.7 12.9 12.4 *

2008 December 13.8 * 13.9 13.

9 14.2 13.4 … 15.0 13.5 … * 19.5 … … 13.5 9.8 10.8 8.1

2009 December 14.1 * 14.3 14.

3 * … * * … * 17.8 … … 13.3 * 10.7 *

2010 December 14.3 16.1 13.9 * 18.7 14.4 * 12.7 13.3 7.7 * 22.6 6.6 8.6 14.6 * 11.7 10.

3

2011 December 13.9 17.1 13.6 * 16.4 13.8 * 11.8 12.1 6.1 9.9 16.4 6.0 8.6 14.0 14.3 12.0 10.

8

2012 December 12.9 15.4 12.0 10.

2 15.3 13.7 * 10.7 11.9 5.9 * 12.5 6.1 8.0 13.1 * 10.8 9.8

2013 May 12.3 13.3 13.0 10.

2 15.2 13.9 * 10.7 12.2 7.4 * 15.5 6.9 5.5 11.8 * 11.1 9.6

June 12.0 12.9 11.5 9.4 14.2 13.5 8.7 10.3 11.9 6.7 * 13.2 6.8 8.9 12.2 13.6 11.2 9.8

July 12.6 13.0 12.3 * 13.9 13.7 14.2 9.3 11.4 3.7 * 14.3 7.4 8.4 12.5 11.2 11.0 9.8

August 12.0 13.8 11.3 10.

9 14.3 13.1 11.1 10.8 10.7 5.4 11.0 16.6 5.7 5.4 12.4 * 11.0 9.7

September 12.2 13.1 11.9 * 13.8 12.7 13.8 10.1 10.8 5.3 * 15.8 6.5 10.

1 12.2 * 10.9 9.2

October 11.7 13.6 11.7 10.

2 12.5 12.5 14.6 10.5 12.7 5.8 * 16.4 6.5

10.1

12.0 9.9 10.7 9.2

November 12.2 13.8 11.3 11.

9 14.5 13.5 * 9.4 11.9 * * 15.9 6.0 9.8 12.5 13.8 10.4 9.5

December 11.1 12.3 10.9 9.5 11.6 12.9 * 9.4 11.0 6.0 * 14.4 4.6 7.3 11.7 * 10.4 9.0

2014 January 11.7 13.1 11.6 10.

5 11.9 13.0 * 8.8 12.9 5.9 * 14.6 5.0 7.5 11.8 10.9 9.7 9.0

February 11.8 10.1 11.6 11.

1 11.8 12.5 * 8.8 11.0 3.4 * 13.8 5.0 6.3 12.0 11.3 9.9 9.0

March 11.2 11.1 10.9 11.

8 11.4 12.6 9.0 9.8 10.9 6.6 9.8 14.6 3.9 4.3 11.3 * 9.7 9.0

April 10.7 11.7 10.3 9.9 10.3 12.5 * 9.4 11.0 4.0 10.8 14.0 4.3 4.1 11.2 9.3 9.8 9.2

May 10.5 11.9 10.0 10.

2 11.1 12.1 7.6 9.9 12.0 6.8 3.7 11.8 3.9 4.8 10.7 * 9.4 8.7

June 10.6 12.1 9.9 11.

0 10.6 12.2 12.1 9.4 11.3 4.2 * 14.3 4.6 3.6 10.9 9.8 9.5 9.1

July 10.8 10.1 10.3 11.

4 10.9 11.5 * 9.6 10.6 6.0 * 13.6 4.0 4.5 10.9 8.9 9.2 9.3

August 10.7 11.4 11.0 9.4 10.3 11.2 13.5 9.5 10.2 3.7 * 13.4 4.2 4.0 11.0 * 9.9 8.3

September 10.8 11.8 10.9 10.

0 10.6 10.9 * 9.1 11.2 2.9 * 13.4 3.3 4.0 10.9 9.5 9.6 8.7

October 10.4 12.4 10.8 9.3 9.9 10.8 10.1 9.4 11.0 3.1 * 13.8 2.9 4.5 10.4 12.4 9.2 8.6

November 9.9 11.2 10.3 9.1 10.6 10.5 * 8.9 11.9 * * 13.3 2.7 * 9.9 * 9.1 8.0

December 9.2 10.8 9.8 8.4 9.5 10.2 11.8 9.3 11.8 2.2 * 12.9 3.2 2.3 9.1 8.8 8.0 7.8

2015 January 9.6 11.3 10.8 7.9 9.4 10.7 14.1 9.3 9.3 0.0 * 15.5 3.1 * 10.0 10.8 8.0 8.1

February 9.3 * 10.2 7.8 9.0 9.6 9.8 8.1 10.2 2.2 * 12.5 3.0 * 10.0 * 8.0 7.8

March 8.9 10.5 9.4 7.2 8.8 9.7 9.0 8.5 11.0 4.8 * 12.7 3.9 * 9.0 8.7 8.1 7.7

April 8.3 9.0 8.2 7.2 8.7 9.4 11.7 8.3 9.3 2.7 * 12.8 2.4 7.9 8.8 * 7.5 7.7

May 7.9 8.5 7.5 6.6 7.3 9.1 12.1 8.6 9.6 3.3 * 13.2 3.3 * 8.5 * 7.2 7.0

June 7.6 * 7.2 7.1 7.6 7.9 11.5 7.6 9.9 2.7 * 13.1 2.9 6.7 8.4 * 7.7 7.0

Source: CBK (2015)


| 97

Table 8.1. ODC income statement - income and expenditures

(In millions of euro: Cumulative data during the year)

Description

Net profit / loss for period

Net operating profit

Net gains or losses arising for revaluations ( +/-)

Provisions for taxes Income Expenditures

Interest

income

of which: Non-Interest income

of which: Interest expenditures

Non-Interest

expenditures

of which: General and

administrative

expenses

Loans Securities Fees and commissi

ons

Deposits Provisions for loan

and other

assets losses

2007 December 33.5 41.5 157.3 117.9 103.0 3.6 39.5 23.8 115.8 26.0 23.2 20.1 17.8 69.7 -0.2 7.9

2008 December 26.0 38.0 195.0 155.7 140.4 2.3 39.3 30.2 157.0 43.1 35.1 27.7 22.8 86.2 -1.5 10.5

2009 December 27.4 31.4 203.3 164.6 159.6 1.2 38.7 32.7 171.9 52.1 48.1 33.4 26.4 86.4 -1.1 2.8

2010 December 32.8 38.2 217.2 175.8 169.6 3.1 41.4 37.5 179.0 55.3 49.4 35.6 28.3 88.1 -1.2 4.3

2011 December 36.0 41.3 240.1 195.1 186.3 4.2 45.0 41.7 198.8 58.4 51.3 43.2 34.8 97.1 -1.2 4.2

2012 December 18.5 22.5 247.0 200.5 194.9 3.0 46.6 44.2 224.6 63.1 57.6 59.1 50.3 102.4 -0.7 3.3

2013 June 15.2 16.3 122.7 99.1 96.3 1.2 23.6 21.9 106.4 31.9 29.5 25.5 21.0 49.0 0.9 2.0

July 17.7 18.9 144.6 116.5 113.2 1.4 28.1 26.0 125.6 37.2 34.4 31.0 25.7 57.5 0.9 2.2

August 18.7 20.1 165.9 133.1 129.4 1.5 32.8 30.0 145.8 42.4 39.2 37.8 31.6 65.5 1.0 2.5

September 22.4 23.9 186.1 149.0 145.0 1.7 37.0 33.8 162.2 47.7 43.9 40.9 33.9 73.7 1.1 2.6

October 25.7 27.6 206.8 165.7 161.1 1.9 41.1 37.8 179.2 53.1 48.8 44.2 36.5 81.9 1.1 3.0

November 23.6 25.7 226.7 181.7 176.5 2.1 45.0 41.5 201.0 58.4 53.4 52.1 43.6 90.4 1.2 3.3

December 26.0 28.0 247.8 198.2 192.5 2.3 49.6 45.6 219.8 63.8 58.0 55.5 46.1 100.5 1.2 3.2

2014 January 2.9 3.5 20.0 16.0 15.4 0.2 4.0 3.6 16.6 5.0 4.5 3.6 2.5 8.0 0.0 0.6

February 5.4 6.2 38.9 31.2 30.1 0.4 7.7 7.0 32.6 9.4 8.3 7.6 5.4 15.7 0.1 1.0

March 9.8 10.8 59.3 47.7 46.0 0.6 11.6 10.6 48.5 13.7 12.0 10.8 7.7 24.0 0.1 1.2

April 12.5 14.0 79.5 63.9 61.5 0.8 15.7 14.5 65.5 17.9 15.6 15.4 11.5 32.3 0.2 1.7

May 19.4 21.7 100.4 80.6 77.7 1.0 19.8 18.6 78.7 22.0 19.0 16.6 11.7 40.2 0.2 2.5

June 26.9 29.7 121.3 97.1 93.6 1.2 24.2 22.4 91.6 25.8 22.1 17.3 11.8 48.5 0.2 3.1

July 31.5 34.9 142.4 115.0 111.0 1.5 27.4 25.3 107.5 29.5 25.2 21.2 14.7 56.9 0.3 3.7

August 40.7 44.6 163.4 132.0 127.5 1.7 31.3 29.2 118.7 32.8 27.9 20.9 13.5 65.1 0.3 4.3

September 46.9 51.4 183.1 147.8 142.7 2.0 35.3 32.9 131.6 35.9 30.3 22.4 14.2 73.4 0.4 4.9

October 49.6 54.4 202.9 163.6 158.0 2.2 39.3 36.8 148.6 38.6 32.5 28.1 19.0 81.8 0.5 5.3

November 54.0 59.1 222.6 179.5 173.4 2.5 43.1 40.3 163.5 41.2 34.5 31.6 21.7 90.7 0.5 5.7

December 60.1 66.4 243.7 195.9 189.5 2.9 47.8 44.5 177.4 44.0 36.4 31.6 20.5 101.8 0.5 6.8

2015 January 5.7 5.9 20.8 16.5 16.1 0.3 4.3 3.8 14.9 2.3 1.8 4.6 3.7 7.9 0.6 0.8

February 12.9 13.8 39.1 31.2 30.3 0.6 7.9 7.2 25.3 4.3 3.3 5.1 3.4 15.9 0.6 1.4

March 19.9 21.5 59.2 47.2 45.8 1.0 12.0 11.0 37.7 6.4 4.9 6.8 4.2 24.5 0.5 2.0

April 28.7 31.5 79.7 62.9 60.9 1.3 16.8 14.8 48.2 8.6 6.3 6.5 2.9 33.1 0.6 2.8

May 39.2 42.7 101.4 78.3 76.2 1.7 23.1 18.5 58.7 10.2 7.7 7.9 2.9 40.6 0.8 3.6

June 46.2 46.2 119.7 94.3 91.6 2.1 24.6 22.4 68.9 12.1 9.1 7.2 1.7 49.6 0.8 4.6

Source: CBK (2015)


| 97

11. References

Kosovo Agency of Statistics

Bank of Slovenia

Bank of Albania

Central Bank of Bosnia and Herzegovina

Central Bank of Montenegro

Croatian National Bank

European Central Bank

International Monetary Fund

National Bank of Serbia

National Bank of the Republic of Macedonia

NLB Group: Annual Reports (2011-2015)

PCH: Annual Reports (2011-2015)

RBI: Annual Reports (2011-2015).

Street Garibaldi, No.33, Prishtina, Republic of Kosovo

Tel: +381 38 222 055; Fax: +381 38 243 763

Web:www.bqk-kos.org

financial stability report - bqk-kos.org · financial stability report number 8 | 11 1....

Documents