Page 80 - Central & Southeast Outlook 2020

5.5 ​Finance - Kosovo
5.6 ​Finance - North Macedonia
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North Macedonia’s commercial banks’ non-performing loan (​NPL)​ ratio stood at 5% at end-September 2019.​​The NPL ratio started to decline rapidly in the second half of 2016 as requirements from the central bank for commercial banks to "clean" their loan portfolios of old and non-performing loans have improved the quality indicators of banks' credit exposures.
The World Bank said that lending continued its robust growth in 2019 with a rise in corporate lending. Overall, credit growth in July 2019 was 6.8% y/y while household credit remained robust at 9.%, accounting for 60% of total growth in credit.
At 10.1% deposits continued to rise y/y, resulting in a loan to-deposit ratio of 82.5%. The survey of credit activity indicates a continued rise in lending, based on higher demand and easing of credit requirements.
Regarding consolidation of the banking sector, Sparkasse Bank Macedonia and Ohridska banka (OB) are expected to be merged in the upcoming period after Austria’s Steiermarkische Bank und Sparkassen, owner of Sparkasse Bank Macedonia, recently acquired OB from Societe Generale.
The merger of SBM and Ohridska will make a new bank that will be the fourth largest on the market with 12-13% market share.
5.7 ​Finance - Moldova
Moldova’s banking system is gradually recovering after the regulatory framework was thoroughly revised​and the biggest banks are now controlled by transparent foreign investors. Lending has taken off as well, although the bias towards retail lending remains a problem.
Significant progress has been achieved in the financial sector’s reform agenda, the International Monetary Fund (IMF) concluded when completing the third and fourth reviews under its programme with the country. Important measures to secure shareholder transparency and fitness and probity of the domestic banking system have been completed. Progress has been achieved in improving supervision, regulatory frameworks, unwinding bank related-party exposures, and strengthening financial safety nets.
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