grew by an average of 13 per cent a year, consistent with the nominal gdp growth during this period. nonetheless, there has been a swift growth in banking assets by 67 per cent in the last three years, which is 2 - 3 times higher than the cumulative growth of nominal gdp. as a result of the enhanced confidence in the domestic banking system, the share of assets to the gdp increased in 2006 to the peak level of 70 per cent, which is comparable to that of the central and easteuropean countries. the performance of commercial loan to private sector and to households is also satisfactory. its growth rate has been constantly exceeding the expansion rate of banking assets. over the last years, private loan has improved considerably ; for 2005 - 2006 it recorded a cumulative growth of 175 per cent, which is the highest growth recorded in the region and the central and east - european countries. another characteristic in support of foreign crediting institutions is the free choice of currency, where almost 3 / 4 ( three - fourth ) of total loan was extended in foreign currency. thus far we may say that credit supply is in prudent levels, since non - performing loans ’ portfolio, though increased moderately to 3. 1 per cent of gross loans in 2006, provides evidence for a limited exposure of the banking sector to non - settlement risk. however, despite the considerable improvement in the assets quality and the commercial banks ’ financial performance, the growth of lending to the private sector and to households remains low as a share to the gdp – about 21. 3 per cent in 2006, compared to 49 per cent in central and east - european countries – providing evidence for other non - utilized banking services capacities in the albanian economy. 2 ) banking law many amendments to the law on the financial system have been made over these years. these amendments resulted from the need of adopting the european directives in this area and the basel core principles for an effective banking supervision. this process was successfully finalized upon the approval of law no. 9662 “ on banks in the republic of albania ” by the parliament. compared with the previous law, the new law is more complete and more accurate in some parts of it. it has integrated some new concepts which are in full compliance with the european directive 83 / 349 and other important directives. it stipulates changes in the licensing of activities by level of capital, in consolidated supervision, etc. in addition, “ risk management ”, which previously was provided for in specific regulations, has been

fatos ibrahimi : business development opportunities in albania speech by mr fatos ibrahimi, first deputy governor of the bank of albania, at the forum on business activity, with governors and managing board of the black sea trade and development bank, tirana, 20 june 2011. * * * distinguished participants, it is a great pleasure for me to take the floor at this forum organized by the black sea trade and development bank, which this time has on focus the promotion of development opportunities in albania. allow me say that the time of holding this forum coincides with the need to ensure the economy ’ s revival at home, after weathering the direct impacts of the global economic and financial crisis. the economy ’ s revival needs to become more sustainable, promoting the development of sectors that provide a competitive advantage by developing specific public policies and taking the public - private investment partnership to a new level. allow me to dwell in more details on the contribution that the financial system and the banking sector can provide to support valuable business projects. the development and good financial position of the financial system in general and the banking sector in particular is a prerequisite for carrying out a successful financial intermediation activity. in fact, over the last decade, the banking sector has experienced a rapid development. well - known european banking groups have entered the market, bringing about knowledge and best technologies, as well as enhancing competition in the interbank market. also, the banks with albanian capital have expanded their network and have properly utilized the advantages of better recognition of the domestic market. as a result of active business development policies, the banking sector has experienced a steady growth of deposits and credit expansion. it suffices to say that at end - 2004, total loan accounted for only 7 % of gdp, while today it accounts for approximately 40 %. about two - thirds of loans are extended to the private sector, while the rest to households and individuals. in business sector, loans are extended to the most important and fast - growing sectors, such as trade, other services, transport and construction. almost all business loans are extended to private sector, though recently an increase in loans for public sector ’ s projects / investments is registered. on the other hand, the expanded banking network and better use of new technologies have enabled the pursuit of more competitive policies, attracting a high number of depositors and providing valuable services to citizens. deposits continue to represent the main source of banking sector financing, an element that highlights its stability. interest rates on loans and deposits