Annual Report 2010 03 August 2011 - Banka Qendrore e ...

CBK
Annual Report 2010
Financial sector claims to the domestic sector reached euro 765.9 million in 2010, an annual
increase of 33.5 percent compared to the previous year. Claims to the domestic sector
mainly consist of financial sector claims to the real sector and the liabilities to the fiscal
sector. Kosovo’s financial sector has only liabilities to the fiscal sector (no claims), which
consist of government deposits in
Figure 6. Net claims of the financial sector, in
the CBK (98.6 percent) and
millions of euro
government deposits at commercial
2,500
banks (1.4 percent). In 2010,
2,000
financial sector claims to the real
1,500
sector reached euro 1.59 billion (an
annual growth of 12.0 percent).
These claims mainly consist of
loans issued by commercial banks
1,000
500
0
(500)
and microfinance institutions. (1,000)
Taking into account the liabilities (1,500)
2007 2008 2009 2010
to the real sector, which mainly
Net claims form the external sector
Net claims form the fiscal sector
consist of deposits at commercial
banks, the financial sector net
Net claims from the real sector
Source: CBK (2011)
claims to the real sector maintained a negative balance of euro 693.9 million (Figure 6).
3.3.2. Structure and Activity of the Banking System
The structure of Kosovo’s banking system in 2010 remained similar to the previous year,
both regarding the number of banks and their ownership structure. In 2010, there were
eight commercial banks operating in the Kosovo’s banking system, of which six foreignowned
banks and two domestically-owned. The foreign-owned banks continue to dominate
the banking market in Kosovo, managing 90.2 percent of total banking system assets (91.1
percent in 2009). The remaining share of assets is managed by the domestically owned
banks (9.8 percent in December 2010). Kosovo’s banking system continues to be
characterized by a high degree of market concentration, with around 77.4 percent of total
banking system assets being
managed by the three largest Figure 7. HHI for assets, loans and deposits
banks. Nevertheless, the continuous 4500
growth in the activity of smaller
banks was reflected in a constant
4000
decline of the degree of
3500
concentration in the banking
market. The degree of market
3000
concentration in the banking
system, measured through the
Herfindahl-Hirschman Index (HHI)
2500
2000
for total assets, was 2,241 in 2010,
2007 2008 2009 2010
which compared to 2009, indicates
that the concentration ratio is lower
by 224.1 HHI points (Figure 7).
Assets
Source: CBK (2011)
Loans Deposits
Unlike in the previous year, when commercial banks were obliged to undertake measures to
reduce their operational expenditures due to the slowdown in the intermediary activity of
the banking system, in 2010, the banking system expanded its infrastructure. In 2010, the
number of branches and sub-branches of commercial banks reached at 303, which
represents an annual increase of 16 units. Moreover, compared to the previous year, the
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