PRESS RELEASE
On the Decision of the Supervisory Council of the Bank of Albania to Abrogate Decision No. 28 dated 25 March 2009 "On the Suspension of the Profit Allocation from Banks and Branches of Foreign Banks"

In its meeting of 24 February 2010, the Supervisory Council of the Bank of Albania discussed the proposal of the Supervision Department to abrogate the Decision No. 28, dated 25 March 2009, of the Supervisory Council of the Bank of Albania 'On the Suspension of the Profit Allocation from Banks and Branches of Foreign Banks'.

Decision No. 28 dated 25 March 2009 was taken in the light of certain specific developments in the Albanian banking system over the given period and the vague situation the global financial markets were going through. At the end of 2008 and the early part of 2009 public confidence in banks worldwide was severely impaired, spreading later among the market operators themselves. Subsequently, the pressure exerted by the global financial markets enhanced substantially, adding to the uncertainty over the short and medium-term perspective of the Albanian banking system.

This measure denoted an enhanced action of prudence against a background of an ever-worsening situation. However, this decision was planned to be only temporary since its purpose was to put constraints on the export of capital. Taking into consideration Albania's numerous commitments -in particular those related to the membership into the European Union and the World Trade Organization- this measure was incompatible with the liberalization spirit of capital account. Foreign investors' capital and profit repatriation (including the dividend transfer) represented a capital transaction liberalized since mid-1992.

To this purpose, this decision was formulated to only apply for a limited duration, having the complete restoration of public confidence in the Albanian banking system as an anchor.

After an 11-month period, the banking system's performance is presented stable. The position of liquidity in the market has recovered substantially and bank deposits have grown at stable rates as a result of the improved public confidence. Moreover, capital adequacy indicator remains intact. Parent banks' obligation to support their branches and subsidiaries' operations in Albania with the necessary liquidity, and to inject additional capital in certain cases was positively evaluated and tested during this period.

In a global context, the financial markets are more stable and vibrant. Following a wave of absorptions and liquidation, commercial banks' position in Europe and the USA seems less vague and safer, owing to the persistent backing of the European Central Bank and the Federal Reserve, and the respective countries' governments, with liquidity.

Against this backdrop, the proposal to abrogate the previous decision is fully rational and it provides room for a more dynamic and pro-active treatment in the supervision of each individual bank's activity.

In carrying out its duties, the Supervision Department remains fully committed to closely monitoring the compliance of individual banks' dividend allocation requirements with the regulatory and supervisory framework provisions. It will also ensure that the satisfaction of these requirements does not affect banks' capitalization and liquidity indicators.