Banking System Forecasts a Prolific 2017: Head of Association of Banks at “Argument”
The Head of the Association of Albanian Banks, Spiro Brumbulli, a guest at the show “Argument” on TV SCAN hosted by journalist Enio Civici, analysed the situation of the banking system in the country, confirming the stability and liquidity of the system, which during 2017 is expected to have a more positive outlook than last year.
During the interview, Brumbulli also analyzed recent events involving several cases of robbery of vehicles transporting cash values, proposing some changes that need to be taken so that such events will not occur in the future.
A first question, what is the situation of the banking system in 2017, meaning in these moments?
Spiro Brumbulli- “It’s been a month that the year has been closed and banks have not yet published their audited financial statements for 2016, but I can say that in the wake of consolidation trends of 2016, even 2017 has started with stabilized indicators. The indicator of capital is strong and stable, the liquidity position is still sound, above the needs that banks normally have. And that is something should worry us, because this liquidity should be better used, but we have been conditioned by the demand. And on the other hand, banks are more prepared for new products and services in order to respond to customers’ requirements. We hope that 2017 will be a better year on the whole than 2016 for banks and the economy, because if economy does not make gains, neither banks make gains.
We believe that this year will be better than 2016 also in terms of quality indicators. Because a part of non-performing loans have been cleared. We hope that the current year will be better and it will not be hampered by events that do not depend on us.“
That means that in general the financial health is okay?
“We cannot raise any hypothesis on the quality, health and safety of the country’s banking system. The system is strong, solid and offers maximum guarantees regarding any of the law requirements. This has been the case during 2016 and it continues to be so, and we are pleased that the banking industry is our best “brand” and that it radiates optimism, which is shown by the facts and figures.
Let us consider the financial indicators, since we are speaking about the specifics of the banking market. We have seen a declining of non-performing loans from the serious figure of 25 per cent to below 20 percent. It is a good news, and it seems that all the actors are working to reduce the level even more. Are non-performing loans decreasing? And is the system more secure?
“In the recent years following the crisis, we have had a fluctuation of Non-Performing Loans indicator between 18 and 25 percent. Currently we are somewhere at 20 percent. I do not want to repeat what I have already addressed about the factors, but the truth is that there is a common front on this issue.
The first phase of the plan to reduce Non-Performing Loans has been completed, and that was drafted by financial institutions, together with the World Bank. And I have information that a second phase is being prepared right now, which is a necessary step. The first stage witnessed legal measures that gave results; there are 35 billion ALL that have been removed from bank balance sheets. The legislation package that we adopted in November, which dealt with bailiffs and civil procedures, has left room for some other acts that need to be drafted. They are on the way and the sooner they come out, the better. We are talking here about just bylaws and they can be approved just through the signature of a minister or by decision of the Prime Minister. There is a common attempt, a common front, and there is a general agreement that Non-Performing Loans should be lowered“.
Now, turning to the great project that the Albanian government has recently announced, which is expected to last three years – namely, the 1 billion euro program of reconstruction. There have been several opinions on previous discussions and meetings that were attended even by representatives of the banking system. What is the opinion of the Association of Banks on the issue?
“We can make an estimation. First, every idea that serves to the good of the country and that seeks to boost the economy is positive and is welcome. The “1 billion euro” project strives to realize some investments that improve our living standards and in turn these investments increase the demand for loans, while we find ourselves in the condition where the state budget is unable to finance them. There is no reason to be against this initiative! We see it positively. Banks have expressed their positive stance. But when considering actual cases, I must say that each bank has its own policies regarding the extent it will support the initiative in question. When it comes to actual cases, the banks are free to act according to their policies and we cannot say anything about that, but in principle it is something positive, it is something that we support and we hope that everything will be in place and will go well”.
Excerpts from the show “Argument”, TV SCAN, hosted by Enio Civici