Tough Competition Dents 2008 Profits of Albanian Banks - Industry Official

“The competitiveness in lending was the main reason for the costs of client transactions not to be increased. This reduces the profit of the banks,” Elvin Meka, General Secretary of Albanian Association of Banks, told SeeNews.

Albania’s banking system consists of 17 banks most of which are subsidiaries of internationals.

The increase in transaction costs of moving funds between banks, due to a sharp increase in Euribor (Euro Interbank Offered Rate), affected also banks operating in Albania, being subsidiaries of major banks, Meka said.

“During the past few months, the interest rates of deposits have been increased, with the aim other funding source be found. This also increases the costs for banks,” he said.

There are worries if the banks can keep the profits earned up to now until the end of the year, Meka said.

Following are the central bank unaudited figures on some indicators by the end of August:

The loan portfolio of Albania’s commercial banks totaled 356.9 billion leks ($3.96 billion/2.9 billion euro) at the end of August, up by 2.1% from a month earlier and 44.6% higher on the year.

Deposit portfolio totalled 363.7 billion leks at the end of August, up 0.9% from a month earlier and 12.01% higher on the year.

(1 euro=123.7139 Albanian leks)