Albanian financial market dominated by banks – Pension funds on the rise

Private pension funds have been the segment with the fastest growth over the past year in the financial market.

According to comparative statistics of the Bank of Albania, the value of assets of these funds last year expanded by 42%.

Although private pension funds still have a very low weight compared to the total financial market, with just 0.1% of the total value of assets, this form of investment is attracting growing interest from individuals.

Thanks to a more active promotion from the funds and financial institutions associated with them, a growing number of individuals are becoming increasingly aware of the advantages of investing in an additional pension in the future.

Investing in a pension fund enables limited fiscal incentives, thanks to an exemption from tax on personal income up to a value of ALL 200 thousand per year.

The insurance market also reported a growing at relatively high rates last year, with an expansion of total assets by 15%, mainly driven by higher growth in revenue from insurance premiums.

A growth by nearly 15% has seen the market of non-bank financial institutions, where the main part is held by microcredit institutions.

The banking system recorded positive growth during the past year.

Total assets grew by approximately 7% compared with a year ago and continue to dominate the financial system, with over 90% of total assets.

While savings and loan associations reported a modest increase in the size of their activity. Total assets of these companies expanded by 2.4% during the year.

Meanwhile, the only segment of the financial market in decline for the past year was that of the investment funds, which shrank by 2.3% over 2016.

SCAN

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