PRESS RELEASE
Interview with Gent Sejko, Governor of the Bank of Albania. Top Channel TV

"Greek crisis poses no threat to Albania" 

What is the extent of non-performing loans and what is their impact on the Albanian economy? 

Non-performing loans hamper lending growth. They represent a considerable share in the banks' portfolio. Accounting for 22.8% of the total credit stock in the banking system, they are sufficient to create a state of pessimism in terms of lending and economic growth. 

The Albanian Financial Forum III was held last Thursday.  What was discussed during the Forum, and were non-performing loans at the focus of this Forum? 

Fruitful discussions in the Forum referred to all the problems related to non-performing loans in Albania. 

What were the recommendations of the Forum? 

We concluded with an action plan, which lays down more clearly the strategies for addressing non-performing loan concerns. They consisted in the voluntary restructuring of non-performing loans. That means that banks, in cooperation with their clients, agree on debt restructuring, with a view to helping businesses make positive progress and avoid having them addressed by courts. 

The Forum also discussed about collateral, for cases when they are at the point when there is no hope of restructuring. 

Other problems that were discussed in the Forum included loan write-offs from balance sheets and the fiscal treatment of loans in the balance sheet. There are problems with the postponement of cases of collateral execution with regard to collection and resolution of problems for non-performing loans. 

We hope that the judiciary system will address the issue of non-performing loans positively. 

About Greece, are there any chances for an immediate solution? 

The Greek politics and people are facing two options. One option is to accept the creditors' offer with the plan of measures relating to pensions and taxes. The other option is to refuse the plan of measures, which would lead Greece into a political and economic collapse. 

Are there any grounds for Albanian citizens to worry about? Would the Greek scenario have a negative effect on the Albanian economy? 

It has had its effects in these past five years, with the main impact on the imports and exports and the further reduction of remittances, which would be insignificant, as they have already fallen. I would like to emphasise that the Albanian banking system is immune. Since the onset of the Greek crisis, the Bank of Albania has taken a number of regulatory and supervisory measures to provide for a normal functioning of Greek banks in Albania. Banks with Greek capital that operate in Albania are subsidiaries, not branches of these banks. We have taken measures for them, from the legal and organisational perspective, to be independent from Greek banks.  Albanian banks with Greek capital have excess liquidity and capital. That means they are well capitalised. The capital ratio for Greek banks stands above the average, standing at around 17%, against the 12% regulatory requirement. Moreover, Greek banks operate with almost 100% Albanian deposits. It must be noted that a situation of lack of confidence by depositors is present; however, we have taken measures for ample liquidity, and we do not expect any problem. There may be also positive developments in the Albanian economy, as the Albanian emigrants return home, together with capital inflows. We have noted that at the onset of the Greek crisis capital flowed in, as emigrants withdrew their savings from banks in Greece and deposited them in banks in Albania. This phenomenon has been also present during these days. Deposits in Albanian banks are growing, due to the situation of lack of confidence in Greece. 

To watch the full interview of the Governor, click on the link below:  

http://www.top-channel.tv/lajme/artikull.php?id=302931#tab