PRESS RELEASE
Decisions of the Supervisory Council, 30 March 2016

In the meeting of 30 March 2016, the Supervisory Council of the Bank of Albania reviewed and decided to:

• Approve the Annual Report of the Bank of Albania 2015

For the first time, the financial statements for the fiscal year 2015 are prepared in full compliance with the International Financial Reporting Standards (IFRS). The preparation of financial statements in compliance with these standards is an important achievement for the Bank of Albania in strengthening the integrity of financial reporting and its transparency.  

These statements are audited by KPMG Albania Sh.p.k., Together with the independent auditor's report, they are an integral part of the Annual Report of the Bank of Albania for 2015.

• Approve the Financial Stability Statement and Financial Stability Report, 2015 H2

The Financial Stability Report is an important periodic document prepared by the Bank of Albania to identify and assess the risks facing the financial system and its infrastructure. The Financial Stability Statement, whose half-yearly release is a legal requirement stemming from the law "On the Bank of Albania", prefaces the Report.

This is the fifteenth approved report and analyses the developments that occurred in 2015 H2. The financial indicators, in terms of soundness, capitalisation and liquidity of banking sector's activity, during the period under review, overall improved, hence strengthening the sectors' resilience to the risks related to its activity.

* The Financial Stability Report will be published in the up coming days on Bank of Albania's website www.bankofalbania.org

• Grant prior approval for conducting additional financial activity by International Commercial Bank (Banka Ndërkombëtare Tregtare) sh.a.

Based on this approval, the International Commercial Bank sha  may now provide additional financial activities such as  guarantees and commitment, and trading for its accounts, including foreign  exchange operations, in the transferable securities market.

• Approve amendments to the Regulation "On the granting of license to non-bank financial institutions" and the Regulation "On licensing, organisation, activity and supervision of foreign exchange bureaus"

The approved amendments are drafted in accordance with the Law "On the insurance and reinsurance" and with the EU legislation. Also, findings from the licensing practices of non-bank financial institutions are materialized in these modifications. Amendments aim to ensure a more effective supervisory approach to non-bank financial institutions and electronic money institutions.

More specifically, the two most important issues consist in:

- granting the right to non-bank financial institutions to perform insurance and re-insurance activities, only upon prior approval by the Bank of Albania;
- determining one sub-category of non-bank financial institutions, which will administrate only the non-performing loans, as a result of the purchase of non-performing portfolios from banks or other non-bank financial institutions that conduct lending, determining eased capital requirements .

' Approve amendments to the Regulation "On Credit Risk Management from Banks and Branches of Foreign Banks" and the Regulation "On Capital Adequacy Ratio"

Bank of Albania commitments are fulfilled through the approval of these amendments, in the framework of the inter-institutional plan of measures for the reduction on non-performing loans in the banking system.

More specifically, these amendments consist in better specifying and determining the procedures related to the registration and maintenance of non-performing loans written-off from banks' balance sheets; pursuing legal procedures for collecting loans despite their write off; the extension of the period of keeping in the balance sheet the assets owned by banks from the loan repayment, up to seven years; the application of a high risk weight of 150% on these assets, with the creation of provisions for potential loss of owned assets' value, compared to their accounting value in the bank books.

In the end, the Supervisory Council was also informed on the daily functional and operational activities of the Bank of Albania.