Albania’s banking market profitability potential at an average level: EIB
The Albanian market is today less attractive for large banking groups.
According to a periodic survey by the European Investment Bank, 71% of the groups consider Albania as a market with “average” potential and lower profitability than the whole group.
The average expectations regarding the Albanian market performance suggest a low willingness to expand the activity through the purchase of other banks in the country.
Some important banking groups have decided to leave Albania, due to their development strategies to a wider scale, but also due to the fall in market potentials.
Credit Agricole and NBG have already sold their banks in Albania, while the Piraeus Group and Societe Generale are expected to do so this year.
Buyers interested in this process are from outside the Eurozone, but also from local actors.
In the latest financial stability report, the Bank of Albania estimates that the growth potential of the banking market in the country needs to be expanded so that this market remains attractive to investor strategies and that its improvement contributes to the economic development of the country.
According to the Bank of Albania, the acceleration of the process of adoption of European standards, in the framework of banking and financial activity in general, may be important, improving the Albanian market competitiveness for foreign banks.
A contribution in this direction, according to the Central Bank, was brought by the adoption of the Law “On Extraordinary Intervention” by the end of 2016.
The Bank of Albania announces that it is working towards the adoption of some important elements that contain the Basel Standard III on oversight of the process, liquidity risk management and systemic risk.
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