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

CBK
Annual Report 2010
4.1.2 Methodology
The process of supplementation of legal framework in the area o financial regulation and
supervision continued to be revised and updated, in order to ensure an effective financial
supervision in compliance with application of Basel Committee principles and standards,
the European Commission directives and the best international standards. The aim of
supplementation of relevant regulations and rules is to ensure establishment of a well
regulated environment, without undue burdens to financial services users.
With purpose of revising the financial supervision regulations, based on the support by
technical assistance, a Commission is established to prepare the new regulatory and
supervision framework according to new Basel Committee standards for banking
supervision. Thus, working groups have been set up within the financial supervision to
work actively on supplementation of relevant regulations and drafting internal policies and
procedures. In cooperation with the technical assistance provided by the IMF, it was
worked on the draft law on banks licensing, regulation and supervision, which project is
expected to be finalized during 2011.
4.2. Banking Supervision
Kosovo banking system also continued with a sustainable growth during 2010, but with a
slower trend compared to 2009. The value of total banking system assets reached at euro
2.237 billion. Total assets increased by 11.0 percent compared to last year’s growth ratio of
21.5 percent.
A slower growth of assets level in the current year is mainly attributed to a slower growth
of deposits, driven to a considerable extent by withdrawal of PTK dividend deposits from
bank accounts and crediting of the Treasury account (Ministry of Economy and Finance) by
euro 233 14 million during 2010.
A faster growth in total assets in 2010 was marked by medium and small classified banks,
compared to large (systematic) banks. Small banks (G3) 15 recorded a higher growth ratio
with euro 39.7 million or 45.3 percent, compared to medium banks (G2) 16 the growth of
which is accounted to be euro 95.7 million or 31.6 percent and large banks (G1) 17 with a
growth of euro 95.8 million or 5.6 percent. Following these changes, the share of medium
banks (G2) and small banks (G3) in total banking system assets increased to 17.1
respectively 5.5 percent from 14.4 and 4.2 percent that was in 2009, whereas the share of
large banks decreased from 81.4 percept in 2009 to 77.4 percent in 2010.
The abovementioned changes add value to the interbank competition, increasing the impact
of small and medium banks in the system. The supervision activity was also adapted to
these changes during the year, increasing the focus on financial performance supervision
and more frequent examinations in group-banks with faster growth trend.
a) Off-site Examination Unit
Pursuant to its duties and responsibilities, the Off-site Examination Unit is engaged at
constant monitoring of risk profile in financial institutions. Reports and periodical
14 This amount does not include earned profit.
15 Includes banks with a share in market 10% of total assets.
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