Page 44 - Annual Report 2023

44 BANKA KOMBËTARE TREGTARE

FINANCE

GROUP

Year 2023 was no short of major developments and which covers pillar 1 and pillar 2 capital requirements,
events. It started briskly with the failure of few large regional macroprudential buffers and recapitalization requirements.
banks in the United States and the orderly takeover of a
Swiss bank, while it closed loudly with renewed increased Following the internal action plans and the
tensions in the Middle East, while the Russia-Ukraine recommendations provided through the annual inspection
conflict marked its second year. In the economic front, rounds of BoA’s Resolution Authority, the new department
inflation continued to remain a critical topic in 2023. Even CCD resumed on the work already done by Financial
though headline inflation appears to have consolidated a Reporting and Budgeting Department with the support
downward path, its volatility signals that this inflation cycle of all units, on enhancing the Bank’s resolution-building
is difficult to be completely controlled and it will continue capacities, particularly related to the dimensions of loss
to be a relevant topic in the short-term future. Despite the absorption and recapitalization, governance structures,
challenges, during 2023 the global economic activity in operational continuity etc.
overall resulted more resilient that initially anticipated.
Regarding the budgeting process, through the
The Albanian economy, even though it was not immune management and coordination of Financial Reporting and
to the global developments, succeeded to maintain a Budgeting Department, the Group has a pivotal role in this
more stable economic outlook. The economic activity important blueprint of the future. Finance Group serves as
was supported by the services sector, and particularly by a catalyst between the vision and the long-term strategy
the tourism industry, that secured employment, wages, envisaged by Calik Holding and the Board of Directors
income and continuous fund inflows. Another economic and the units of the Bank that are equipped with the day-
highlight for 2023 was the significant appreciation of Lek to-day business viewpoint. The Finance Group transforms
vis-à-vis all major foreign currencies. This is a development this interaction in measurable financial data and metrics
that is affecting the economy through various channels, which are diligently followed, monitored and reported to
often in opposite directions, and which is expected to the executive management and the Board of Directors.
have a lasting impact in the decision-making process of
important economic agents, including the banking system. The budget not only supports setting clear business and
profitability targets, but at the same time it supports the
Banka Kombëtare Tregtare successfully conducted Bank in the process of assessing its capital and funding
its activity despite these dynamics and often opposing needs. Being a bank of systemic importance for the
factors that shaped the economic and financial landscape domestic market, BKT is subject to resolution requirements
in 2023. Finance Group, through its departments, serves and the full range of the applicable macroprudential
as a fundamental pillar that supports the activity of the requirements, in addition to the minimum and additional
Bank to remain aligned to its goals and objectives. The capital requirements designed and implemented by
Group exercises its mission by producing accurate, timely the regulator. Under this strict and stringent regulatory
and reliable financial reporting, analytical performance framework, the projection of capital and funding needs
analysis as well as coordinating and controlling of the has become a complex and multilayered task that requires
financial budgets and plans. to balance the regulatory requirements, market potential
and costs.
Considering the role of the Finance Group in the Bank
and in alignment with the framework designed by Bank As result of this dynamic process, Banka Kombëtare
of Albania (BoA) on Bank’s resolution and extraordinary Tregtare, in 2023 completed successfully for the first time
intervention, in 2023 the Board of Directors sanctioned in the Albanian market, the issuance of a debt obligation,
the establishment of a new department within Finance in the form of unsecured bond. The bond subscribed
Group, the Capital Compliance Department (CCD). This amount was around EUR 30.1 million and it is recognized
department is specifically dedicated in designing and by the Resolution Authority, as eligible liability for resolution
deploying a comprehensive and evolving framework purposes. Beyond offering a unique investment alternative
to support Bank’s operational and financial resolution for the investors, this bond plays a pivotal role in meeting
capacities and moreover it oversees the comprehensive the Bank’s transitional requirement for regulatory capital
capital requirements framework applied to BKT, and eligible liabilities.