Page 145 - Annual Report 2022

83 Banka Kombëtare Tregtare Annual Report 2022

Banka Kombëtare Tregtare Sh.a.
Notes to the Consolidated Financial Statements for the year ended
31 December 2022 (Amounts in USD, unless otherwise stated)

22. Subordinated debt
Subordinated debt of USD 50,319,179 (31 December 2021: USD 28,405,688) represents the equivalent amount of a ten-year
facility of EUR 25 million, bearing an interest rate of 7.63% and payable on its maturity date with bullet payment. Subordinated
debt was obtained from the Green for Growth Fund Southeast Europe, under the Subordinated Term Loan Facility Agreement,
signed on 22 December 2015 with the purpose of granting loans related to Energy Efficiency and Renewable Energy investments.
Pursuant to the approvals granted by Bank of Albania, the subordinated debt was classified as second-tier capital and included
in the regulatory capital of the Bank. Moreover, during 2022, BKT Kosova obtained the same ten-year facility instrument from
Green for Growth Fund Southeast Europe and European Fund For Southeast Europe amounting in total at EUR 22 milion, bearing
an interest rate of 6.38%.
23. Shareholder’s equity and reserves
Share Capital
At 31 December 2022 the authorised share capital comprised 24,291,498 ordinary shares (31 December 2021: 24,291,498).
The shares have a par value of USD 12.35. All issued shares are fully paid. The holder of ordinary shares is entitled to receive
dividends, if declared. All shares rank equally with regard to the Bank’s residual assets.
Reserves

Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of
foreign operations as well as from the translation of consolidated financial statements from functional currency to presentation
currency.
Fair value reserve and impairment of FVOCI
c) Fair value reserve
The fair value reserve includes the cumulative net change in the fair value of available-for-sale investments (investment securities
measured at FVOCI), excluding impairment losses, until the investment is derecognised or impaired.
d) Impairment of FVOCI
Following the requirements of the standard “IFRS 9-Financial Instruments”, impairment of FVOCI represents the impairment
provision for debt securities measured at FVOCI recognised in other comprehensive income.
The impairment of FVOCI at USD 33,023,800 (31 December 2021: USD 5,822,888) for the financial year 2022 is composed of
available-for-sale securities impairment provision at USD 32,847,021 (31 December 2021: USD 5,756,552) and treasury bills
available-for-sale impairment provision at USD 176,779 (31 December 2021: USD 66,336).

Retained earnings
Retained earnings as at 31 December 2022, includes the cumulative non distributed earnings. As described in Note 1, the Bank
created legal reserves of Lek 859,352 thousand (equivalent of USD 7,523,659) and decided to distribute Lek 5,618,000 thousand
(equivalent of USD 50,000,000) as dividends, using part of the statutory net profit for the year ended December 31, 2021 and part
of the net profit of the year 2020. The remaining part of statutory profit for the year 2021 was kept as retained earnings. Retained
earnings are distributable.
Retained earnings include the amount 9,887,370 USD representing the revaluation surplus, net of taxes, created for the ex-Head
Office property which is sold within 2022 year at the revaluated amount, in accordance with the requirements of IAS 16 “Property,
plant and equipment”.