Total assets have amounted to ALL 353,6 billion, whilst liabilities have amounted to ALL 321 billion. Realized profit totalled about ALL 10 (9,993) billion, the highest in the last three years. This result has increased the Bank of Albania’s capital. Pursuant to the obligations of Law No. 8269, dated 23 December 1997, Article 9, 25 percent, about ALL 2,5 (2,479) billion, of the net profit was capitalized, causing the general reserve to amount to ALL 10 (9.994) billion. Similarly, the Bank of Albania has observed the obligation of transferring the net profit to the State Budget pursuant to Article 10 of the same Law, and paid to the State Budget about ALL 6,74 billion for the year 2009. Pursuant to Article 10, in March 2010 the balance of 2009 net profit amounting to ALL 2,4 (2,436) billion was paid to the State Budget. BIS Review 78/2010  9  Honourable Ms. Chairwoman, Dear deputies, Thanking you for your attention, on behalf of the Supervisory Council of the Bank of Albania, I want to guarantee the Parliament of the Republic of Albania that the central bank will remain a responsible decision-making institution in 2010. Our decision-making will:   remain transparent both for the financial market and the public at large;    consider all possible information in and out of Albania;    rely on qualified human resources, and    improve its policy and operational framework, considering the best contemporary and international practices.
The banking system remains sound, a fact that also attributes to the effective carrying out of the regulatory and supervisory function of the Bank of Albania. In what follows I would like to elaborate more on these aspects. 2.1  Banking system performance  The Albanian banking system’s total assets increased in 2009, but at a rate about twice lower than in 2008. This decrease reflects fully the lower expansion of lending. Our banking system continues to be mainly financed by public deposits and be concentrated on business lending. The banking system’s deposits and loans grew but at a lower rate than in the previous years. Loans to total deposits increased by nearly 3 percentage points, from 62 to 65 percent. On the other hand, the increase of deposits as a result of the restored public confidence has improved the liquidity situation in the banking system. Non-performing loans increased in 2009 owing to the economic slowdown and the exchange rate depreciation. Loan portfolio quality index expressed as “non-performing loans to total outstanding loans” rose to 10.48 percent as at end 2009 from 6.64 percent at the end of 2008. On net basis, that is deducting total provision fund, the same figure is only 6.3 percent. The Bank of Albania has monitored the situation closely being aware of the pro-cyclical effects that these developments may have on the loan portfolio. Despite the loan portfolio deterioration, capital adequacy and quality, to carry out the banking operations, to extend and expand lending, have remained almost intact.