Annual Report 2010 03 August 2011 - Banka Qendrore e ...
Annual Report 2010 03 August 2011 - Banka Qendrore e ...
Annual Report 2010 03 August 2011 - Banka Qendrore e ...
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<strong>Annual</strong> <strong>Report</strong> <strong>2010</strong><br />
CBK<br />
38 |<br />
3.3.2.3 Banking system performance<br />
Kosovo’s banking system concluded year <strong>2010</strong> with a net profit of euro 32.9 million, which<br />
is for 30.3 percent higher compared to the previous year. Considering the decrease of the<br />
net profit of the banking system in 2009, the increase of the net profit in <strong>2010</strong> indicates a<br />
considerable improvement in the<br />
performance of this system.<br />
The increase of profit mainly<br />
resulted from the faster increase of 30%<br />
3.0%<br />
lending activity during <strong>2010</strong><br />
25%<br />
2.5%<br />
compared to the previous year,<br />
20%<br />
2.0%<br />
considering that interest income<br />
15%<br />
1.5%<br />
represents the main source of<br />
banking sector income. The<br />
10%<br />
1.0%<br />
slowdown of the banking system<br />
5%<br />
0.5%<br />
0%<br />
expenditures growth during this<br />
2007 2008 2009 <strong>2010</strong><br />
period has also contributed to the<br />
increase of profit. Despite the<br />
increase of the net profit, the<br />
ROAE<br />
ROAA (right axis)<br />
Source: CBK (<strong>2011</strong>)<br />
Return on Average Assets (ROAA) remained at the same level with the previous year,<br />
standing at 1.5 percent (Figure 16). 8 Whereas, Return on Average Equity (ROAE) reached<br />
at 14.9 percent in <strong>2010</strong>, compared to 13.9 percent in 2009.<br />
Table 6. Income statement, in millions of euro<br />
Figure 16. Banking system performance indicators<br />
0.0%<br />
Description 2007 2008 2009 <strong>2010</strong><br />
Income<br />
Interest income 117.9 155.7 163.2 175.8<br />
Non-interest income 39.5 39.3 38.2 41.4<br />
Total income 157.3 195.0 201.5 217.2<br />
Expenditures<br />
Interest expenditures 26.0 38.1 52.2 55.2<br />
Non-interest expenditures 19.9 21.9 32.6 36.0<br />
General and administrative expenditures 69.7 86.0 87.0 88.0<br />
Total expenditures 115.6 146.0 171.8 179.2<br />
Net income<br />
Net operating income 41.7 49.0 29.6 37.9<br />
Net income before tax 41.3 47.6 28.9 37.2<br />
Tax provisions 7.9 11.2 3.6 4.3<br />
Net profit/loss w ithin the period 33.5 36.4 25.3 32.9<br />
Source: CBK (<strong>2011</strong>)<br />
Banking system income amounted at euro 217.2 million in <strong>2010</strong>, which represents an<br />
annual growth of 7.8 percent (3.3 percent in 2009), indicating an upward trend of banking<br />
system income compared to year 2009. The increase of income in this period mainly<br />
resulted from the increase in the lending activity that led to an increase of revenues from<br />
loan interest. The structure of the banking sector revenues continues to be dominated by<br />
interest income from loans, which in <strong>2010</strong> represented 80.1 percent of total banking system
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