We are in the middle of a digital transformation

How would you assess the performance of your bank during 2021? What were the main challenges and achievements you would like to highlight, for the banking sector as a whole and for your bank in particular?

Despite COVID-19 pandemics and their impacts on the local and global economy, 2021 proved to be the year of economic growth and positive performance in the banking sector in Albania.Banks remained highly liquid while having increased lending volumes in both retail and business segments, boosting consumption and supporting business activities in production, services, construction, and agriculture, contributing to higher year-end profitability, back in the pre-pandemic level.

Raiffeisen bank had a successful performance with a net profit of 3.7 bn lek (or 30.8mn EUR) by end of the year 2021, reaching 78% growth YoY (local standard).The Bank visibly increased its Asset volume by 17.6 years on a yearly basis, with most of the contribution coming from higher lending volumes. While deposit volume increased by almost 17% vs the previous year.

RBAL outperformed the market by increasing lending by 24,9% YoY and ensuring 2nd position in the market with a 17.1% market share. Business lending improved during 2021 supporting our Corporate and SE customer needs for investments and project finance, leading to a 15.3% market share by the end of 2021. In retail lending, we remain the “the leader” in the market, with consumer loans disbursements resuming pre-pandemic levels after Q1 of 2021 while continuing the promotion of our “mortgage loan” products.

Therefore, the market share reached above 19.9%, surpassing our forecasts for the year 2021.Domestic market surveys have shown that our bank ranks as the best in the class of corporate customers regarding the customer experience NPS (Net Promoter Score). It scores significantly better than our main competitors due to our service quality, correctness, and innovative products.

RBAL is considered by its corporate customers as the best bank in innovative digital solutions. We are also making progress with our individual customer service moving up to the second position in our latest NPS survey this year.

RBAL remains very well capitalized and highly liquid, while the Capital Adequacy ratio stands at 20.12% by December 2021, above the market average.RBAL's financial position is strong and ready to stand up to the new challenges we are already facing in the year 2022.

The world economy is facing new risks, related to high inflation and the war in Eastern Europe. What consequences can these developments have on the Albanian economy and the financial sector in Albania?

Inflation is inching up more quickly than before mostly because of supply-side pressures. As economies lifted restriction measures and demand is gradually returning to pre-pandemic levels supply could not keep the pace. And that has pushed up the inflation rate.In this environment with an inflation rate of over 5% in the Eurozone, Albania recorded the highest inflation rate in March at 5,7% and is expected to increase further in the following quarters due to the structure of the price basket (high share of Food items) and increased oil prices. The supply-side inflation pressures will continue to be more prolonged than previously envisaged, and we are starting to see some second-round effects of these pressures transmitted to other items too.

The Bank of Albania has the same primary goal of price stability as the European Central Bank when it comes to inflation.I believe that Boa has managed excellently to steer the economy away from the recession while also keeping the price stability as required by law.We need also to take into consideration the fact that Albania is an open economy where imported inflation plays a significant role.

Therefore, the stability of the exchange rate plays a dampening effect on foreign prices, and this has helped the country in the past reduce the imported inflation impact that otherwise would have been compounded by the internal pressures.In the short term, there will be no significant impact since in Albania the full transmission of the monetary policies faces some barriers.

The quality of loans will not suffer a lot considering the resilience demonstrated during a much more difficult period such as the pandemic, but some pressures on risk costs for specific products are to be expected In Albania, we are one of the countries with the lowest loan to deposit and loans to GDP ratio with great potential to increase and any deterioration of the loan quality will be easily absorbed by the banking sector after many years of focusing in cleaning the balance sheet.

What are your main expectations and objectives for business performance during 2022?

Raiffeisen Bank will continue its developments to further contribute to the country’s economy. 

We are in a middle of a digital revolution that is transforming the way of doing business. Digital transformation will be the mainstream of all our banking segments, as an opportunity to enhance our customers’ value as innovation stands in our mission statement.

We will further invest in our digital solutions to maintain our leading position in the market. Raiffeisen Bank is the 1st bank to bring a digital wallet into the market, RaiPay, and we have already in the pipeline some other digital offerings which will be available for the 1st time in Albania.

Further on, the quality of customer services in all our segments will continue to remain a priority.Retail, Corporate & SE Segments will keep on focusing on providing the best customers products and services in the market, like digital banking services, innovative paying methods, loans, etc. We will continue focusing on the personal development of our employees, to obtain the highest customer service standards. We remain fully committed to meeting our customers’ expectations, getting better at reading signals of change, and becoming lean and agile in response to market conditions.

Lately our management board team joined two new members for Retail Business and Operation & IT and we expect that with their valuable experience and mindset to bring further enhancement of the business and offerings to the market.