Page 124 - Annual Report 2023

55 BANKA KOMBËTARE TREGTARE
Notes to the Consolidated Financial Statements for the year ended 31 December 2023
(amounts in USD, unless otherwise stated)

The interest re-pricing dates of significant categories of financial assets and liabilities of the Bank as at 31 December 2022 were as
follows:

Up to 1 month 1-3 months 3-12 months 1-5 years Over 5 year Total
Assets
Cash and balances with 537,491,661 - - - - 537,491,661
Central Bank
Placement and balances with 438,682,238 6,328,325 28,891,449 - - 473,902,012
banks
Investment securities 544,221,909 842,902,193 1,524,667,276 - - 2,911,791,378
Loans to banks - 112,115,708 33,778,616 - - 145,894,324
Loans to customers 465,842,887 53,095,097 486,797,952 212,380,453 165,565,560 1,383,681,949
Total 1,986,238,695 1,014,441,323 2,074,135,293 212,380,453 165,565,560 5,452,761,324

Liabilities
Customer deposits 2,516,787,705 236,541,685 1,044,534,502 747,297,697 46,274,277 4,591,435,866
Due to banks and financial 290,358,300 11,110,523 4,315,511 - - 305,784,334
institutions
Subordinated debt - - 50,319,179 - - 50,319,179
Total 2,807,146,005 247,652,208 1,099,169,192 747,297,697 46,274,277 4,947,539,379

Interest rate sensitivity
The sensitivity analysis below has been determined based on the exposure to interest rates at the reporting date and the stipulated
change taking place at the beginning of the financial year and held constant throughout the reporting period. The following is a stipulation
of effects of changes in interest rate to the net profit, when the change is applied to the GAP position as per re-pricing terms presented
in note above, assuming all the other variables are held constant:
31 December 2023 31 December 2022
Up to 1 year Over 1 year Up to 1 year Over 1 year
Interest rate increases by 2% 14,330,923 50,616,470 61,145,712 52,833,193
Interest rate increases by 1.5% 10,748,192 37,962,353 45,859,284 39,624,895
Interest rate increases by 1% 7,165,461 25,308,235 30,572,856 26,416,596
Interest rate decreases by 1% (7,165,461) (25,308,235) (30,572,856) (26,416,596)
Interest rate decreases by 1.5% (10,748,192) (37,962,353) (45,859,284) (39,624,895)
Interest rate decreases by 2% (14,330,923) (50,616,470) (61,145,712) (52,833,193)

(e) Operational risks
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Bank’s processes, personnel,
technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal
and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the Bank’s
operations.
The Bank’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the Bank’s
reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.
The implementation of controls to address operational risk is supported by the development of overall standards for the management
of operational risk in the following areas:
• requirements for appropriate segregation of duties, including the independent authorisation of transactions
• requirements for the reconciliation and monitoring of transactions
• compliance with regulatory and other legal requirements