Page 125 - BKT Annual Report 2024 EN

Notes to the Consolidated Financial Statements for the year ended 31 December 2024 Notes to the Consolidated Financial Statements for the year ended 31 December 2024
(amounts in USD, unless otherwise stated) (amounts in USD, unless otherwise stated)

Retained earnings
Creditors mainly represent balances that relate to old transactions of the Albanian Government and are pending on the future
determination of the rightful owners of these amounts. Retained earnings as at 31 December 2024, includes the cumulative non distributed earnings. As described in Note 1, Bank created
legal reserves of Lek 393,079 thousand (equivalent of USD 4,072,511); decided to increase the authorised and paid-in capital with Lek
4,826,000 thousand (equivalent of USD 50,000,000.05) using part of accumulated retained earnings from year 2022; and to distribute
Bonus payable represents the accrued yearly performance bonus for the Bank’s staff and management, which is expected to be paid
out within the first quarter of 2025. Lek 4,826,000 thousand as dividends (equivalent of USD 50,000,000), using the remaining part of accumulated retained earnings
from year 2022 and part of the statutory net profit for the year ended December 31, 2023. The remaining part of the net profit of the
year 2023 was kept as retained earnings.
Liability for retiring employees represents a specific fund created in 2002 by the Bank, which will be paid to staff on their retirement.
The investment in this fund was discontinued by the Bank on 30 September 2010 (See note 3(s).ii.).

25. INTEREST INCOME

22. DEBT SECURITIES ISSUED Interest income is composed as follows:
On December 4 , 2023 BKT issued a 4-year term bonds with a total nominal value of EUR 30,720,000 and a coupon rate of 4%. In
th
addition, on November 1st, 2024 BKT issued a 5-year term bonds with a total nominal value of EUR 30,000,000 and a coupon rate of Year ended Year ended
4.25%. Pursuant to the approvals granted by Bank of Albania, the bonds are classified as “Eligible Liability” for MREL purposes based 31 December 2024 31 December 2023
on Law no. 133/2016 “On the recovery and resolution of Banks in the Republic of Albania” and Bank of Albania Regulation nr 78/2020.
Placements with banks and balances with Central Bank 30,076,219 25,022,917
23. SUBORDINATED DEBT
Subordinated debt of USD 49,096,696 (31 December 2023: USD 52,182,032) represents the equivalent amount of a ten-year facility Investment securities - Treasury bills 7,771,582 8,299,809
of EUR 25 million, bearing an interest rate of 7.81% and payable on its maturity date with bullet payment. Subordinated debt was
obtained from the Green for Growth Fund Southeast Europe, under the Subordinated Term Loan Facility Agreement, signed on 22 Investment securities - Trading and available-for-sale 46,761,356 32,057,161
December 2015 with the purpose of granting loans related to Energy Efficiency and Renewable Energy investments. Pursuant to
the approvals granted by Bank of Albania, the subordinated debt was classified as second-tier capital and included in the regulatory Investment securities - Held-to-maturity 97,912,619 80,827,102
capital of the Bank. Moreover, during 2022, BKT Kosova obtained the same ten-year facility instrument from Green for Growth Fund
Southeast Europe and European Fund For Southeast Europe amounting in total at EUR 22 milion, bearing an interest rate of 6.56%. Loans to customers 108,136,606 96,900,614

24. SHAREHOLDER’S EQUITY AND RESERVES 290,658,382 243,107,603
Share Capital
At 31 December 2024 the authorised share capital comprised 28,340,081 ordinary shares (31 December 2023: 24,291,498). The
shares have a par value of USD 12.35. All issued shares are fully paid. The holder of ordinary shares is entitled to receive dividends, if 26. INTEREST EXPENSE
declared. All shares rank equally with regard to the Bank’s residual assets.
Interest expense raised from financial liabilities measured at amortized cost is composed as follows:
Reserves
Translation reserve Year ended Year ended
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign 31 December 2024 31 December 2023
operations as well as from the translation of consolidated financial statements from functional currency to presentation currency.
Due to banks and financial institutions 12,266,653 9,396,317
Fair value reserve and impairment of FVOCI
a) Fair value reserve Customer deposits 55,508,811 40,373,680
The fair value reserve includes the cumulative net change in the fair value of available-for-sale investments (investment securities
measured at FVOCI), excluding impairment losses, until the investment is derecognised or impaired. Lease liability 365,933 352,937

b) Impairment of FVOCI 68,141,397 50,122,934
Following the requirements of the standard “IFRS 9-Financial Instruments”, impairment of FVOCI represents the impairment provision
for debt securities measured at FVOCI recognised in other comprehensive income.
The impairment of FVOCI at USD 53,235,107 (31 December 2023: USD 44,415,974) for the financial year 2024 is composed of
available-for-sale securities impairment provision at USD 53,201,510 (31 December 2023: USD 44,390,980) and treasury bills available-
for-sale impairment provision at USD 33,597 (31 December 2023: USD 24,994).

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