The governor of the Central Bank of the Republic of Kosovo, Fehmi Mehmeti, has held the last conference in his position as the head of the CBK.
He said that despite the difficulties it has faced, CBK has managed to implement its objectives, ensuring a stable financial system, especially in recent years, where it managed to successfully cope with the crises caused by the Covid pandemic. 19 and now the Russian aggression in Ukraine, but also to be one of the main pillars of support for businesses and individuals, and with this also for the country's economy.
"The financial system in the country during this five-year period has been characterized by positive developments and continuous growth in all its indicators. Under my leadership as Governor, CBK has managed to ensure a sustainable, stable, well-capitalized and liquid financial system. A similar attitude regarding the financial system in the country can also be evidenced in the reports of international financial institutions, such as: the International Monetary Fund, the World Bank, the European Commission Report, the European Central Bank, the US Department of State and many other institutions.
In addition, the general financial performance of CBK during this period has been very satisfactory, achieving comprehensive income during the entire five-year period of governance", stated Governor Mehmeti.
During this period, the banking sector has recorded continuous growth both in the number of institutions and at the same time in the growth of the activity of this sector. From ten banks at the end of 2018 to October 2022, this number increased to twelve by adding two financial institutions with banking activity.
This sector from October 2018 to 2022 has recorded growth, where at the end of 2022 it reached 6.76 billion euros, from 4.18 billion at the end of 2018.
The increase in the assets of the banking sector resulted in the increase of the credit portfolio that in December 2022 reached the value of 4.35 billion euros, from 2.75 billion in 2018.
The banking sector throughout this period, despite the continuous double-digit growth of lending, has continued to be well capitalized and liquid. The liquidity ratio of the banking sector continues to be high and above the regulatory requirements of the CBK.
In addition to the banking sector, the MFI-IFJB also recorded a stable performance, where at the end of 2022 the value of the assets of this sector was 387.7 million euros, an increase of 146.1 million euros, or 60.5 percent compared to 2018.
The stable and qualitative growth of loans is also confirmed by the level of non-performing loans in relation to total loans, which at the end of 2022 was 1.8 percent, lower compared to 2018 when it was 2.2%.
At the press conference, the Governor mentioned the decisions to withdraw the licenses of the IuteCredit and Monego institutions.
"We have had very positive developments in the insurance sector as well. The assets of the insurance sector, which represent about 3.0 percent of the total assets of the financial system, at the end of 2022 marked the value of 267.5 million euros, marking an annual increase of 12.0 percent, while during the five-year period they have marked an increase of 52.2 percent. Gross premiums written by insurance companies at the end of 2022 amounted to 134 million euros, from 92.1 million euros at the end of 2018, or an increase over the last five years of 45.5 percent, while claims paid amounted to over 64.3 million euros or an increase of 49.9 percent during this period. As you are aware, the insurance sector has been one of the most problematic sectors, for which, on the occasion of the beginning of the mandate, I have decided to start taking actions in order to improve the state of this sector. From the 21.8 million euros that was the lack of capital in 2018, based on the unaudited financial statements, as of December 31, 2022, no insurance company is below the capital requirements. Whereas, the lack of acceptable assets to cover technical provisions from 16.2 million euros as of December 31, 2018, on December 31, 2022, all companies are within the required regulatory parameters. Out of a total of 12 Non-Life insurers operating in Kosovo in 2018, six of them had a lack of capital and acceptable assets to cover technical provisions. As a result of the measures taken by the CBK, with the aim of protecting policyholders and preventing the increase of negative impact on the insurance market and the financial system in general, based on the duties and responsibilities arising from the Law on the CBK and the Law on Insurance, during this period 2018-2022 the CBK has made a decision to revoke the licenses of two insurers, namely insurance companies "Insig" and "New Kosovo", said Governor Mehmeti.
Furthermore, Governor Mehmeti has stated that the close supervision and continuous requirements for the fulfillment of legal requirements, has resulted in continuous injection of capital from the insurance sector in the country. During the years 2019-2022, the additional capital injection was in the amount of 20.3 million euros.
During the five-year period, the Pension Funds in Kosovo have recorded continuous growth, where from 1.65 billion euros at the end of 2017, as of December 2022, the pension funds have reached the value of 2.42 billion euros.
"It is important to note that despite the withdrawal of 10 percent of pension funds during 2020, as a result of the approval of the law for economic recovery, in the amount of about 200 million euros, pension funds have continued the upward trend during the following years, namely during 2021 and 2022. However, due to unfavorable movements in international markets, as a result of Russian aggression in Ukraine, during 2022 the pension sector recorded a decrease in investment returns, where the decrease in these investments during 2022 was worth about 120 million euros. However, with the improvement of the financial markets, it is estimated that even the decline in the value of these investments will be recovered. While the new pension contributions during 2022 marked the value of around 242 million euros".
During this period, the CBK continued its commitment also in the function of protecting the rights of consumers of financial services, where 810 complaints were examined until November of last year. Meanwhile, the CBK's commitment to protecting the rights of consumers of financial services, either through financial education programs or through corrective measures against financial institutions, has been and will remain a priority of the CBK in the coming years.
Governor Mehmeti thanked all the CBK staff for the work and dedication shown in the performance of their work duties during this period.
Also, he thanked all the media for the continuous and effective cooperation cultivated during the last five years and informing the public about the activities of the CBK, as well as the economic and financial developments in the country.