PRESS RELEASE
Decisions of the Supervisory Council, 5 April 2023

On 5 April 2023, the Supervisory Council of the Bank of Albania reviewed and decided to:

• Approve the Financial Stability Statement and Report on the second half of 2022

The Financial Stability Report is an important periodic document prepared by the Bank of Albania whose main purpose is to identify and assess risks to the financial system and its infrastructure. The Financial Stability Statement is released every six months, in accordance with the Law “On the Bank of Albania.”

The Bank of Albania deems that in 2022 H2 (hereinafter ‘the period’), operations of the banking sector were stable. Overall, the banking sector activity, deposits and loans expanded, but the growth pace was lower than in the previous periods, reflecting also the exchange rate appreciation. Credit quality continued to improve while the other indicators of performance and financial resilience remain at adequate levels. Overall, the exposure of the banking sector to risks appears contained, but credit and market risks should be assessed closely and on an ongoing basis. Economic developments throughout the period were positive. Economic growth was accompanied by a reduction of unemployment and increase in employment and wages. Fiscal policy maintained a consolidation trend for most part of the period. Inflationary pressures remained high and the Bank of Albania continued the normalisation of monetary policy. Though inflation rate has slowed recently, risks to economic and financial developments in Albania remain present. These risks relate to the uncertainty around geopolitical developments and across international markets, the path of inflation, cybernetic security issues and the heightened impact of market risks. Against this backdrop, it is important for economic policies to preserve the macroeconomic stability, while financial institutions and supervisory authorities to maintain a prudential monitoring of developments in the financial activity and undertake the necessary actions for enhancing the resilience of financial system and avoiding risks to financial stability.

The full Financial Stability Report will be published in the coming days on the Bank of Albania's website http://www.bankofalbania.org/.

• Preliminary approve the conduct of the additional financial activity by OTP Albania Bank sh.a.

According to this approval, OTP Albania may conduct the additional financial activity of intermediation in insurance and reinsurance, assuming the role of the broker.

The Supervisory Council was also informed on other daily functional and operational activities of the Bank of Albania.