The Central Bank of the Republic of Kosovo has welcomed the conclusions drawn in the report of the European Commission for Kosovo for 2020, which recognizes the commitment and measures taken in the financial sector and also provides recommendations for further advancements.
The report states that the financial sector, supported by the measures taken by the CBK regarding the postponement of loan installment payments, has continued to grow in 2020 and the first half of 2021, while maintaining capital adequacy and liquidity levels.
These measures helped curb the impact of the crisis on the banking sector and supported lending growth.
The financial sector withstood the Covid-19 crisis mainly due to high levels of bank capital.
The capital adequacy ratio of banks remained stable and visible above the required capital adequacy ratio of 12%.
It was also noted that the Central Bank of the Republic of Kosovo gradually continued with the implementation of the Basel III framework on capital adequacy requirements and leverage ratio.
The European Commission report estimates that financial intermediation has continued to grow. Despite the pandemic, lending by the banking sector increased by 7.1% in 2020, while in April-June 2021 it accelerated to over 10% from year to year. Lending growth was facilitated by lower interest rates, continued deposit growth, improved contract enforcement and increased credit guarantee.
The report emphasizes the non-constitution of the Governing Board of the CBK, thus affecting the governance of the Central Bank and its decision-making process. Therefore, the request is reiterated that as soon as possible the CBK Board becomes fully functional.