Banka Kombëtare Tregtare SH.A. (BKT), Albania’s largest bank, has received ‘BB-/B’ long- and short-term issuer credit ratings from S&P Global Ratings, with a stable outlook. The agency also assigned a ‘BB’ long-term resolution counterparty rating (RCR) to the bank. According to S&P, BKT’s financial performance is supported by its strong market position in Albania and Kosovo, where it holds a 25% and 17% market share in total assets, respectively.
“BKT has a proven track record and an established market position,” S&P stated in its assessment. The bank operates a universal banking model, offering retail, corporate, and treasury services, and has consistently maintained a return on equity above 12% since its privatization in 2000, with a three-year average of 17.5%.
The rating agency noted that BKT’s business model is heavily weighted toward securities, which made up about half of its total assets at the end of 2024. This exposes the bank to higher market risks compared to peers that focus more on lending. S&P highlighted that BKT’s substantial holdings of Albanian sovereign bonds, accounting for 27% of total assets, create concentration risk, though this is consistent with sector averages in Albania.
S&P forecasts that BKT’s capitalization will keep pace with loan growth, which is expected to average about 15% annually from 2025 to 2027. The bank’s risk-adjusted capital ratio is projected to increase slightly from 6.9% in December 2024 to between 7.0% and 7.5% over the next few years. S&P also anticipates an ROE of around 17% and a dividend payout ratio of 35%-40%.
Asset quality remains strong, with nonperforming loan ratios below national averages in both Albania (2.5%) and Kosovo (1.2%) as of December 2024. The weighted-average loan-to-value ratio for mortgages in Albania stands at 57%, providing a buffer against housing market volatility.
“BKT’s asset quality remains robust, underpinned by disciplined underwriting standards,” S&P reported.
The bank’s deposit base is described as stable and granular, with a significant share sourced from retail customers and low concentration among top depositors. As of December 2024, BKT had a stable funding ratio of 230% and a loan-to-deposit ratio of 33%, indicating strong capacity for lending growth.
“BKT’s substantial liquidity cushion underscores its strong liquidity position,” according to S&P, noting that broad liquid assets made up 59% of total assets at year-end 2024.
S&P does not expect extraordinary support or negative intervention from BKT’s owner, Calik Holding, which is based in Turkiye and owns the bank entirely. While the parent group could potentially have some influence due to the confidence-sensitive nature of banking, S&P considers BKT resilient to broader group stress because of limited operational and financial links.
Regarding regulatory requirements, S&P pointed out that BKT has limited additional loss-absorbing capacity (ALAC) to support senior unsecured debt, forecasting an ALAC ratio of only 0.5%-0.6% by 2027, well below the threshold for a rating uplift.
The stable outlook reflects expectations that BKT will maintain good financial performance, sound asset quality, and stable capitalization over the next year. S&P said it could lower the ratings if BKT’s market position or asset quality deteriorates significantly or if its deposit franchise weakens. Conversely, an improved economic environment in Albania or Kosovo could lead to higher ratings.
