Kosovo's banking sector 2013 net profit up 44% to EUR 26.6mn

By bne IntelliNews January 28, 2014

Commercial banks in Kosovo ended 2013 with a EUR 26.6mn aggregate net profit, up 44% from the previous year, on the back of bigger non-interest income and smaller loan loss provisions, data from the central bank showed.

In December 2013 alone, the sector posted a combined net profit of EUR 2.9mn, recovering from the EUR 2.2mn loss in the same month of 2012.

The sector's aggregate revenue barely increased in 2013, edging up 0.3% to EUR 247.8mn as a rise in non-interest income was accompanied by a fall in interest income. Banks' interest income shrank 1.1% to EUR 198.2mn, while their non-interest income increased 6.4% to EUR 49.6mn, driven by bigger fees and commissions earnings (up 3.3% y/y to EUR 45.6mn).

Meanwhile, the combined expenditures of Kosovo's banking sector fell 2.4% to EUR 219.2mn. The banks' interest costs climbed 1.1% to EUR 63.8mn. On the other hand, non-interest costs declined 7% to EUR 54.9mn as loan loss provisions dropped by 9.6%, compensating for a 7.7% increase in fees and commissions costs. In addition, general and administrative expenses fell 1.9% to EUR 100.5mn.

The central bank data also showed that the assets of Kosovo's nine commercial banks increased 8.1% to EUR 3bn at end-2013. The ratio of bank assets to the full-year GDP forecast advanced to 56.3% from 55.5% a year earlier.

Cumulative year-to-date, EUR mn Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Change, y/y
Net profit 17.7 18.7 22.4 25.7 23.6 26.6 43.8%
 Revenue 144.6 165.9 186.1 206.8 226.7 247.8 0.3%
   Interest income 116.5 133.1 149.0 165.7 181.7 198.2 -1.1%
    from loans 113.2 129.4 145.0 161.1 176.5 192.5 -1.2%
   Non-interest income 28.1 32.8 37.0 41.1 45.0 49.6 6.4%
    Fees and commissions 26.0 30.0 33.8 37.8 41.5 45.6 3.3%
 Expenditures 125.6 145.8 162.2 179.2 201.0 219.2 -2.4%
   Interest expenditures 37.2 42.4 47.7 53.1 58.4 63.8 1.1%
   Non-interest expenditures 31.0 37.8 40.9 44.2 52.1 54.9 -7.0%
    Fees and commissions 5.3 6.2 6.9 7.7 8.5 9.4 7.7%
    Provisions 25.7 31.6 33.9 36.5 43.6 45.5 -9.6%
   General and administrative expenses 57.5 65.5 73.7 81.9 90.4 100.5 -1.9%
Source: c-bank (BQK)              
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