Banking sector, record capitalization – Satisfaction ratio reached 19.1% at the end of March
The capitalization of the banking system has reached a record level in the first quarter of this year. According to data from the Bank of Albania, at the end of March the ratio of capital adequacy reached 19.1%, the highest level recorded in the series of statistics of recent years of the central bank.
The increase in bank capitalization is also related to good financial results, but the factor with the main impact has been the strengthening of regulatory requirements of the Bank of Albania. Beginning in March, the first macroprudential capital supplements came into force. These additions are intended to increase the absorption capacity against possible future shocks, especially for banks of systemic importance. Macroprudential additions overlap with standard bank capitalization requirements. Macroprudential additions fall into four categories, some of which will be fixed and some of which will be proportional to the importance of the bank and the pace of lending. The first supplement, to be applied from March this year, is the capital conservation supplement and will be mandatory for all banks, regardless of their size. Conservative supplements will be up 0.5% per year until a maximum increase of 2.5% is achieved by 2024.
The next addition has included only a separate group of banks, those of systemic importance. The Bank of Albania has identified five banks of systemic importance, which are also the largest in the country. For each of them an additional capital has been determined in relation to the specific systemic importance of each.
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