financial stability report - Banka Qendrore e Republikës së Kosovës

Financial Stability Report
Number 3
contributed by only 0.4pp. The key
contributors to the growth of the
banking assets in the first six
months were loans and cash and
balances with CBK, which
contributed by 6.1pp and 1.3pp,
respectively (Figure 20). On the
other hand, balances with
commercial banks in the last two
years have negatively contributed
to the growth of total banking
assets (2.2pp decline in June 2012
and 1.4pp decline in June 2011).
Figure 20. The contribution in asset growth by
category, in percent
30%
20%
10%
0%
-10%
June 2009 June 2010 June 2011 June 2012
Other assets
Gross loans and leasing
Balance with commercial banks
Annual growth rate of assets (right axis)
Source: CBK (2012)
Fixed assets
Securities
Cash and balance with CBK
25%
20%
15%
10%
5%
0%
Despite the fact that the economic
growth continues to be positive, signs of slowdown in the economic activity for 2012 have
been noticed, mainly driven by the economic decline that is characterizing some of the
Eurozone countries. A similar situation is characterizing also the neighboring countries,
where some of them are experiencing recession. Judging by the slowdown of indicators of
the other sectors of Kosovo’s economy, such as the decline of exports, slowdown of imports
and the decline of foreign investments and remittances, a rather similar situation has also
embraced the banking system, which recorded a slowdown of lending activity.
The annual growth rate of loans in June 2012 was 9.3 percent, compared to the rate of 15.7
percent that was recorded in June 2011. A more significant slowdown was noticed in the
securities which grew by 4.8 percent, compared to the annual growth rate of 80.4 percent in
June 2011. One of the main reasons for the slowdown of investments in securities was the
problem with public debt in some of the Eurozone countries and consequently the
uncertainties driven by the performance of these economies.
Financial activity of the commercial banks in Kosovo remains concentrated in the
intermediation activity within Kosovo’s economy, where loans consist 67 percent of total
banking system assets (Table 5). On the other hand, investments abroad comprised 21.9
percent of the total banking sector assets in June 2012 (25.3 percent in June 2011).
Table 5. Structure of banking system assets
Cash and balance w ith w ith
CBK
Balance w ith commercial
banks
Securities
Gross loans and leasing
Fixed assets
Other assets
Total
Description
June 2009 June 2010 June 2011
June 2012
In millions of euro In percent In millions of euro In percent In millions of euro In percent In millions of euro In percent
241.9 12.5 268.1 12.1 265.3 10.6 298.4 11.3
286.7 14.9 351.6 15.8 319.5 12.8 265.3 10.0
13.3 0.7 114.0 5.1 205.6 8.2 215.6 8.1
1,280.9 66.5 1,404.6 63.3 1,624.9 65.0 1,776.3 67.0
40.1 2.1 42.6 1.9 45.0 1.8 49.9 1.9
64.3 3.3 37.8 1.7 40.7 1.6 46.9 1.8
1,927.1 100.0 2,218.8 100.0 2,501.0 100.0 2,652.3 100.0
Source: CBK (2012)
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