Interview with Mr. Dritan Mustafa, Chief Executive Officer, for Monitor Magazine

• How would you assess the performance of Tirana Bank during the past year? What were the most significant developments in your bank and more broadly in the activity of the Albanian banking system?

2023 was another exceptional year for our institution. Tirana Bank achieved healthy performance in terms of organic growth, confirming an active presence in the local market.

Once again this year, the growth rate in key commercial indicators was higher than the banking sector’s average. Despite the challenging economic environment, Tirana Bank recorded record results in 2023, achieving a 144% increase in net profit, amounting to 21 million Euros (net of the capital revaluation effect). Return on Equity (ROE) exceeded 20%. These results indicate the strength and sustainability of our business model, as well as the commitment and expertise of our dedicated team.

Total assets increased by 27% (around 275 million Euros equiv.) compared to 2022, surpassing any previous result in our Bank's history and reaching a total of approximately 1.3 billion Euros, a sign of continuous expansion of activity in recent years. This exceptional growth is an evidence of the sustained trust of our Bank's customers.

The development strategy has continued to be successfully implemented, that’s why the loan portfolio increased by 18% compared to the previous year (approximately 90 million Euros), demonstrating our ability to capitalize on market opportunities while maintaining a healthy interest margin. Among the key sectors financed during the year, we can mention trade, services, infrastructure, tourism, and energy.

Our Bank has consistently maintained a high-quality asset portfolio. As a result of rigorous risk management practices, we have made further reductions in non-performing loans.

During 2023, we saw a significant increase in deposits, confirming the trust of clients in Tirana Bank. Our deposit base grew by 20% from the previous year, reaching a total of approximately 1 billion euros. This success can be attributed to our comprehensive range of deposit products, competitive interest rates, supported also by personalized customer service, offered with professionalism by our staff.

As a result of process improvements and the introduction of technology in customer service, we have significantly enhanced our digital capabilities.

With reference to the consolidated strategy for business development, we remain confident that Tirana Bank will continue to be one of the most important and dynamic institutions in our banking system.

 

• After the pandemic, there is a noticeable increase in the role of tourism and the real estate sector in the economy. How are these developments affecting the banking sector?

The rapid growth of tourism and the real estate sector is undoubtedly one of the key factors driving the growth of the Albanian economy and certainly has a positive impact on the banking sector.The expansion of the tourism industry and the construction sector often require considerable capital investment. While the development of tourism infrastructure, hotels, resorts, and other facilities drives an increased demand for financing from banks to support these projects, similarly, the development of the construction sector increases demand for mortgage loans from individuals and businesses involved in this field.

Although these sectors offer opportunities for loans, they also pose risks for banks. The tourism industry is subject to seasonal fluctuations, geopolitical tensions, and changes in consumer preferences, while the real estate sector may experience instability due to oversupply, changes in property prices, or regulatory changes affecting construction and development projects. Banks need to carefully assess and manage these risks to ensure the sustainability of their loans activities.Despite macroeconomic challenges, the banking system remains resilient, strengthening liquidity positions and capital levels.

 

• What do you think will be the main challenges for the banking sector during 2024?

We remain focused on the strategic development of the Bank, strengthening our presence in the market, with the technological advancements we have undertaken step by step to meet all customer needs. We are committed and aim to continue focusing on quality customer service and the continuous expansion of activities in the local and regional market for the year 2024.

With the growth of our presence in online services, we aim to increase user satisfaction by providing fast and quality service.

Cybersecurity poses a challenge to the banking system. Banks must continue to invest in technological infrastructure and human resources capacities to enhance protective capabilities against cyber-attacks.