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Tirana, March 18 (AENews) – After the liquidation of BKP bank in Kosova, experts are concerned over what they call “structural problems” created in these years due to the yet unresolved status of the disputed territory of Kosova.

“Post Telecommunication of Kosova, (PTK) the state owned fixed and mobile telephony monopoly, owns around EUR130 million in deposits distributed in the six remaining banks in the country. These deposits make up 15% of total customer deposits for the banking industry,” banking experts in Pristina say. The government of Kosova has been tempted several times to use the funds from PTK to cover its EUR40 million budget deficit.

“One day that money could be distributed as dividend for the government of Kosova, and after that, which in turn would bring about the inability of the different banks to fulfill the Authority’s rule which has determined that total lending portfolio could is not to exceed 70% of customer deposits,” an experts says. According AENews calculations presently lending activities make up 60% of total customer deposits.

PTK’s decision to lower its deposits in the bankrupted Banka Kreditore e Prishtinës, (BKP) from EUR26 million at the end of 2004, to less then EUR13 million at end of 2005, was what complicated the financial situation of the bank, experts say.

Last week, the Banks and Payments Supervisory Authority of Kosovo decided to close and immediately liquidate the smallest bank in the country due to the fact that its loans portfolio had gone up to 80.4% of customer deposits. Another factor in the Authorities decision was because during the last months the bank’s management had engaged in high risk lending operation for a total of EUR12 million.

At the end of 2005, total assets for the seven banks operating in Kosovo were estimated at EUR961.5 million. The Banking sector in Kosovo is very concentrated, with ProCredit Bank of Kosovo owning 40% of total assets and the other leading bank, Raiffeisen, owning 27% of assets. Shareholders equity in Kosova’s banks makes up less than 8% of total assets.

During 2005, total banking sector assets grew by 20%, meanwhile loans grew by 27.7%, according to Authority’s data.

Banking sector in Kosova 2005
	Assets		Liabilities and shareholders equity
In thousand euro	Total	From assets: loans	Total	Liabilities	From liabilities: customer deposits	Shareholders equity	Shareholders equity in % of assets	Loans in % of customer deposits
PCB	379,855	167,769	379,855	362,308	336,277	17,547	4.62	49.89
RZB	263,238	162,986	263,238	240,223	230,396	23,015	8.74	70.74
BEK	45,300	19,825	45,300	39,311	38,762	5,989	13.22	51.15
BKP*	42,650	28,882	42,650	37,276	35,915	5,374	12.60	80.42
BPB	50,608	22,975	50,608	46,171	44,562	4,437	8.77	51.56
KSB	120,381	63,631	120,381	110,138	101,988	10,243	8.51	62.39
BRK	59,457	26,011	59,457	52,371	50,684	7,086	11.92	51.32
Total	961,489	492,079	961,489	887,798	838,584	73,691	7.66	58.68

Source: BPK data. Elaboration AENews