The Growth in the Albanian Banking Sector in the Global Financial Crisis Period and Its Reflection to the Local Economy

The last global economic and financial crisis of 2007-2008 affected Albania considerably. However, it managed being one of the few countries with positive economic growth in Europe. But, the more remarkable event has happened in the country’s banking system: the amount of its assets has almost doubled in the period of 2008-2020, from 845 billion to 1.581billion Albanian LEK. This huge enlargement in the sector’s balance sheet has occurred by the increase in the deposits. Moreover, it has happened in the period where the deposit interest rates saw the historically low levels by the continual decreases from year to year. In addition to economic slowdown, some country-specific factors, such as lack of alternative financial instruments, difficulties in reaching some of them, and unawareness of many savings holders about the existing choices- except putting in bank account- have played role in this happening. Meanwhile, the banks have generally preferred buying bond/obligation to giving loan in the same period, which caused the loans’ share in the total assets to decrease from 48 percent to 39 percent and the securities’ share in it to increase from 32 percent to 35 percent. The decline in credit demand is one of the factors of this change, but the credit-less economic recovery, which started in 2013 and continued till the Pandemic period, implies that it is mostly due to the banks’ reluctance in making new loans. The huge rise in bad loans in the period of 2008-2013, and the limited effect of the following recovery on liquid assets as well as the increasing debt need of the government have led the banks to choose this way.The current structure of the banking sector’s assets should change in favor of the private sector. The banks should have more desire to give credit to the economy, but this requires some positive changes in the potential borrowers’ behaviors and management sense as well as improvement in non-performing loans issue. Meantime, the government should perform its functions more properly, and tend to meet its financial needs from outside, and thus a bigger part of the domestic resources will be presented to usage of the business enterprises and households. This change is crucial to launch a sustainable economic growth after the Pandemic period, and for the banking system’s soundness in the long-run, which requires having strong and diversified relations with the clients, including meeting their financial needs. Keywords: Albania, banking sector, financial crisis, asset allocation. DOI: 10.7176/RJFA/12-10-03 Publication date:May 31st 202

The Effect of Changes in Economic Growth on Non-Performing Loans (NPLs) Problem in the Greek Banking System

The Greek economy was affected very badly by the global economic and financial crisis of 2007-2008. The main reason of this catastrophic event is that the country’s speedy economic and financial growth in the pre-crisis period heavily based on the foreign funds, and the flow of these funds stopped immediately -even turned to opposite direction- with the spread of the crisis to Europe. This negative happening as well as the rearrangement of the public debts and remarkable reduction in the bank deposits led to a big financial crisis, and thus economic recession. Meanwhile, the loan quality in the banking system worsened extremely -almost half of the credits turned to bad loan- due to the macroeconomic deterioration as well as the banks’ very tolerated lending policies before the crisis, the borrowers’ imperfect attitudes, and improper governance. The improvement in NPLs ratio, which started simultaneously with the modest economic recovery in 2017, decreased it to 30.2 percent in 2020 from its peak level of 48.5 percent in 2016. However, a big part of it has been achieved thanks to write-offs and loan-sales.In this study, it was aimed to measure the effect of the changes in economic growth on these drastic changes in NPLs ratio. Although the changes in the gross domestic product (GDP) and NPLs ratio have always been in consistency with the economic theory, except the pandemic year of 2020, the often big differences between their changing rates imply that some other factors have also played significant role on NPLs movements. The findings of some studies for Greece indicate to remarkable impact of both economic growth and the other factors on bad loans issue. The results of our regression analysis also show that the relation between economic growth and NPLs is not so strong.In spite of the noticeable improvement, NPLs ratio is still at a very high level and requires constant remarkable declines in order to come down to the generally accepted levels. To perform this and have economic and financial recovery at the same time, the recovery should not be achieved only by write-offs and portfolio sales, but by collections from borrowers, and executions. The banks and the government should make the necessary changes in their policies and applications so as to decrease NPLs ratio through new lending, compromise with proper borrowers, and court executions. Keywords: Greece, global crisis, sovereign debt crisis, economic growth, non-performing loans. DOI: 10.7176/RJFA/12-12-05 Publication date:June 30th 202

The prevalence of microalbuminuria and relevant cardiovascular risk factors in Turkish hypertensive patients.

Objectives: A growing body of data illustrates the importance of microalbuminuria (MAU) as a strong predictor of cardiovascular risk in the hypertensive population. The present study was designed to define the prevalence of MAU and associated cardiovascular risk factors among Turkish hypertensive outpatients. Study design: Representing the Turkish arm of the multinational i-SEARCH study involving 1,750 sites in 26 countries around the world, a total of 1,926 hypertensive patients from different centers were included in this observational and cross-sectional survey study. Patients with reasons for a false-positive MAU test were excluded. The prevalence of MAU was assessed using a dipstick test, and patients were inquired about comorbidities, comedication, and known cardiovascular risk factors. Results: The overall prevalence of MAU was 64.7% and there was no difference between genders. Most of the patients (82.5%) had uncontrolled hypertension, 35.6% had dyslipidemia, and 35.5% had diabetes, predominantly type 2. Almost one-third of the patients (26.4%) had at least one cardiovascular-related comorbidity, with 20.3% having documented coronary artery disease (CAD). Almost all patients (96.8%) had one or more risk factors for cardiovascular disease in addition to hypertension, including family history of myocardial infarction or CAD, diabetes, dyslipidemia, lack of physical exercise, and smoking. A trend towards higher MAU values in the presence of CAD was determined. Conclusion: Microalbuminuria tests should be routinely used as a screening and monitoring tool for the assessment of subsequent cardiovascular morbidity and mortality among hypertensive patients. © 2011 Turkish Society of Cardiology

The prevalence of microalbuminuria and relevant cardiovascular risk factors in Turkish hypertensive patients

Objectives: A growing body of data illustrates the importance of microalbuminuria (MAU) as a strong predictor of cardiovascular risk in the hypertensive population. The present study was designed to define the prevalence of MAU and associated cardiovascular risk factors among Turkish hypertensive outpatients. Study design: Representing the Turkish arm of the multinational i-SEARCH study involving 1,750 sites in 26 countries around the world, a total of 1,926 hypertensive patients from different centers were included in this observational and cross-sectional survey study. Patients with reasons for a false-positive MAU test were excluded. The prevalence of MAU was assessed using a dipstick test, and patients were inquired about comorbidities, comedication, and known cardiovascular risk factors. Results: The overall prevalence of MAU was 64.7% and there was no difference between genders. Most of the patients (82.5%) had uncontrolled hypertension, 35.6% had dyslipidemia, and 35.5% had diabetes, predominantly type 2. Almost one-third of the patients (26.4%) had at least one cardiovascular-related comorbidity, with 20.3% having documented coronary artery disease (CAD). Almost all patients (96.8%) had one or more risk factors for cardiovascular disease in addition to hypertension, including family history of myocardial infarction or CAD, diabetes, dyslipidemia, lack of physical exercise, and smoking. A trend towards higher MAU values in the presence of CAD was determined. Conclusion: Microalbuminuria tests should be routinely used as a screening and monitoring tool for the assessment of subsequent cardiovascular morbidity and mortality among hypertensive patients. © 2011 Turkish Society of Cardiology