Tirana / November 9, 2015
A latest report by Bank of Albania shows that Raiffeisen and BKT private banks’ concentration in the market has increased during 2015, after their assets comprise 48% of the total amount of banking system’ assets. In 2014, these two banks’ assets comprised 44.9% of the total amount of banking system’ assets, says the report.
The concentration of BKT and Raiffeisen in the banking system in Albania has increased also in terms of deposits, which increased slightly to 38.6%, from 36.3% that was in 2014.
Bank of Albania report highlights that BKT, Raiffeisen and Intensa San Paolo private banks register higher profit margins, compared to other second tier banks. The banking system in Albania is comprised of 16 private banks which provide very competitive offers and products, despite the increase of concentration in two main banks.
High concentration within a market is typically not a desirable quality. It tends to lead to higher prices, lower outputs and a smaller consumer surplus even in the absence of collusion. Firms in highly concentrated markets often sustain high profits for long periods of time.