Page 47 - Annual Report 2023

ANNUAL REPORT 2023 47

BOND ISSUANCE AND RECOGNITION PHASES

1
Internal Preparation & 2 Issuance 3 BoA Recognition
Approval Application in FSA

MREL REQUIREMENTS
The Resolution Authority requires systemic banks to have regulatory capital in terms of risk
weighted exposures that will ensure the Bank has the necessary loss absorbing capacity and the
necessary recapitalization capacity . Considering the initial licensing requirements, this requirement
results in at least the doubling of the requirements on regulatory capital instruments, including as
well eligible liabilities, that need to be held by BKT, and the other systemic banks in the country.

Following the recognition from BoA, the bond will be reported as unsecured obligation, with the
status of eligible liabilities. Following the recognition of the bond as eligible liability BKT has fulfilled
the transitional regulatory requirement for 2023 and the internal business plan.

CLOSING REMARKS
The issuance of a debt instrument eligible under resolutions proceeding in 2023 by BKT was a
first and a successful process. It was a pivotal moment in our Bank’s history and a milestone in
the financial securities’ local market development path. This bond comes as a new investment
alternative, overcoming the classic boundaries of the Albanian securities market. It offers an
opportunity for financial education of investors and pioneers a new path for the extraordinary
transformative power that financial instruments can generate.

* In addition to the above, BKT is subject to the full set of macroprudential capital buffers for bucket 3 systematic
banks, as required by Bank of Albania.