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

CBK
Annual Report 2010
percent in 2010) compared to the growth of Risk-Weighted Assets (RWA), which increased
by 9 percent in 2010. During 2010, banks increased the investments in securities, which
convey lower risk compared to other categories, thus contributing to the slowdown of the
RWA growth.
Figure 24. Total banking system capital
In the end of 2010, the total
amount of banking system capital
was euro 271.4 million, compared
to euro 240.2 million in the same
period of 2009. Since December
2008, the capital of the banking
system followed an increasing
trend, but the growth rate
continuously slowed down (Figure
24). The main source of financing
for the banking system’s capital
continues to be the shareholders
capital with a share of 62.8
percent, followed by the retained
profit by banks with a share of
21.9 percent.
Based on CBK rule number I 10 , in 250
December 2010, banks were 200
obliged to maintain the level of
capital at euro 175.3 million.
150
100
However, banks operating in
Kosovo continuously kept a higher
level of regulative capital than
50
0
required by the CBK. In December
2010, the total regulative capital
was euro 271.4 million, which Source: CBK (2011)
represents a surplus of regulative
capital amounting at euro 96.1 million (Figure 25).
3.3.2.4.1. Stress-test analysis
300
250
200
150
100
50
0
The satisfactory position of the Kosovo’s banking system with regard to the sustainability
against the credit and liquidity risk is confirmed also by the stress-test analysis. The
results presented in this report are based on December 2010 data on commercial banks
operating in Kosovo. This part provides an analysis of the sensitivity of the banking system
against credit risk, combined with the interest rate and exchange rate risks. The sensitivity
against the liquidity risk was also tested, based on hypothetic assumptions on the
withdrawal of deposits from the banking system.
33.4%
15.9%
13.0%
December 2008 December 2009 December 2010
Capital
Source: CBK (2011)
Annual growth rate of capital
Figure 25. Total capital and regulatory capital, in
millions of euro
300
40%
35%
30%
25%
20%
15%
10%
December 2007 December 2009 December 2009 December 2010
Regulatory capital
Capital
5%
0%
i. Stress-test results - credit risk
In assessing the banking system sensitivity against the credit risk, it is assumed that the
share of Non-Performing Loans (NPL) to total banking system loans will increase by 4.5pp,
10 According to the CBK Rule 1, banks are obliged to maintain a capital to RWA ratio of at least 12 percent.
| 43