cAPITAL
The Bank of Albania has placed the United Bank of Albania (UBA) under restrictive measures by suspending the granting of new loans, especially those for real estate, until it increases its capital and adjusts its indicators.
Capital learned a few months ago that the BoA has placed UBA under strict supervision, asking it to increase its regulatory capital in accordance with the requirements of the law. According to data from the official balance sheet that the United Bank of Albania submitted to the Central Bank, last year the capital adequacy ratio dropped to 15.71 percent from 19.81 percent at the end of 2023.
Currently, the regulatory framework in force requires banks to have a minimum capital of 12 percent of risk-weighted assets, but the Bank of Albania prefers to remain conservative and impose a higher capital ratio on private banks.
Historical data shows that the capital adequacy ratio for the United Bank of Albania has been quite volatile in recent years. In 2022, this ratio dropped to the minimum allowed by law of around 12 percent, but a year later UBA reported a significantly improved capital ratio, at 19 percent, as a result of the injection of new capital by shareholders.
However, some of these injections have been challenged by the Regulatory Authority as not being in compliance with legal requirements. This, together with the losses recorded by UBA over the last two years, has caused the capital adequacy ratio to drop to 15.71 percent at the end of last year.
According to financial statements, in 2023, UBA reported a loss of 5.5 million euros, while last year its balance sheet closed with a loss of 6.2 million euros.
Following these developments, the Bank of Albania has decided to act by placing UBA on a mandatory plan of measures to increase regulatory capital. This decision came after an inspection that the BoA Supervision Department conducted at UBA during March-April of this year.
Confidential sources told Kapital that UBA is gradually fulfilling the conditions set by the supervision.
The United Bank of Albania is the smallest bank in the Albanian market, occupying only 1.1 percent of the market. At the end of the first half of the year, UBA's total assets were around 250 million euros, while its capital was around 36 million euros.
This makes it a systemically insignificant bank for the Albanian financial system. But despite this, the Bank of Albania has preferred to remain in a conservative position by placing it under mandatory measures to increase capital.
Currently, the United Bank of Albania is 98 percent owned by businessman Kadri Morinaj's Eurosig insurance company, while 2 percent of its shares are owned by several small shareholders.
Editorial
