The International Monetary Fund has recognized the commitment and effective governance of the Central Bank of the Republic of Kosovo in maintaining the stability of the banking system.
According to IMF estimates, the banking sector has managed to cope well with the situation created, as a result of measures taken to cope with the pandemic.
Banks have coped well with the recession so far, relying on high levels of liquidity and pre-pandemic Covid-19 capital, which have contributed to maintaining the stability of the financial system.
The IMF also acknowledged the measures taken by the CBK to restructure loans, and in December 2020, all banks were required to comply with regulatory requirements in force prior to the Covid-19 pandemic. Preliminary data indicate a healthy portfolio of loans, with the possibility of a slight increase in non-performing loans in the coming months.
At the end of 2020, the assets of the banking sector increased by more than 12 percent. The level of non-performing loans was 2.63 percent, the coverage ratio of non-performing loans with provisions was 143.27 percent, while the capital adequacy ratio was 16.7 percent, the report said.
Reforms implemented by the Central Bank of the Republic of Kosovo in previous years, which focused on strengthening financial security and the banking supervisory framework, helped alleviate the pressures from the pandemic.
Many of the implemented reforms have been designed with the support of the IMF, and the CBK remains committed to continuing to strengthen its capacity and systems, including implementing the recommendations set out in the Financial System Stability Review report.
Therefore, the IMF Executive Directors recommended that the authorities closely monitor the quality of bank assets, ensure transparency in the coverage of losses after regulatory tolerance is removed, and further strengthen the framework against money laundering and terrorist financing.
For more details, you can access the full report on the link: