ECONOMY

Sanpaolo in Albania

TIRANA – The sale of two Albanian banks to Sanpaolo IMI has put the Balkan nation on Europe’s business map and will bring in enough credit to satisfy its growing infrastructure needs, a bank executive said this week. Sanpaolo entered the market by buying 80 percent of the small Italian-Albanian Bank in late 2005. In October, it bought 80 percent of the American Bank of Albania (ABA), the country’s second-biggest lender after Raiffeisen Albania. ABA Chief Executive Lorenzo Roncari said the arrival of Sanpaolo, which is to be acquired by Banca Intesa to create a European-top-10 bank, would increase confidence in Albania and get people’s attention. «Finally Albania is on the radar screen,» Roncari told Reuters in an interview. «We will bring undoubtedly more products. And the lending capacity of our bank with Sanpaolo will be increased tremendously.» Albania remains one of Europe’s poorest countries with a reputation for corruption and bureaucracy. But it has been growing at rates of around 6 percent a year over five years, and inflation is stable at around 3 percent. Roncari said the backing of Sanpaolo meant more and bigger credits, faster. The new group would be looking at the needs of the country’s infrastructure and try to fill the gap. «The big lenders in Albania will not be only the World Bank and the European Bank for Reconstruction and Development (EBRD), but there will be a commercial bank as well,» Roncari said. He mentioned a 16-million-euro project to build a 1-kilometer-long jetty to help refuel oil tankers which is being financed by ABA and two smaller banks. «Before, a project like this could only be undertaken by the EBRD or someone else,» Roncari said. «I am not saying we are substituting them, (but) we can be a much bigger developer.» The timing could be auspicious, as Albania’s government has announced an ambitious plan to overhaul or build major roads, ports and power plants over the next few years, with an estimated total cost of more than 1 billion euros. The International Monetary Fund is currently considering what amount Tirana will be allowed to borrow at commercial rates from banks apart from the World Bank and the IMF. Asked how much the new group could lend to infrastructure projects, Roncari said: «If you look at developing two to three roads and two to three power stations… half a billion euros is not too far-fetched. I think we can do it.» Roncari said he believed there would be consolidation in the Albanian financial sector, adding that a logical step for ABA would be a merger with the Italian-Albanian Bank. In the medium term, ABA plans to further expand abroad and become the bank of choice for Albania’s expatriate community, an increasingly affluent, savings-minded group of a million people who send relatives a billion euros a year in remittances. Having already opened a branch in Greece, ABA is now looking at the UN-governed province of Kosovo, the Former Yugoslav Republic of Macedonia and Montenegro, which also have ethnic Albanian populations. Roncari said he hoped that with the arrival of Sanpaolo, the added clout of a banking giant and the improvement in terms of ethics and corporate governance would attract long-term investors and mean sustainable growth for years to come. «We have been preaching this for a long time,» Roncari said. «People can come to Albania and do a lot of things instead of going to China and Romania.»