Page 78 - 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)

Fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or dealer Fair values
price quotations. For all other financial instruments the Bank determines fair values using valuation techniques. Valuation techniques The table below sets out the carrying amounts and fair values of the financial assets and liabilities and analyses financial instruments
include net present value and discounted cash flow models, comparison to similar instruments for which market observable prices measured at fair value at the end of the reporting period, by the level in the fair value hierarchy into which the fair value measurement
exist and other valuation models. The objective of valuation techniques is to arrive at a fair value determination that reflects the price of is categorised:
the financial instrument at the reporting date that would have been determined by market participants acting at arm’s length.
Carrying Amount Fair Value
The Bank uses widely recognized valuation models for determining the fair value of common and more simple financial instruments, 31 December 2024 Note Level 1 Level 2 Level 3 Total
like interest rate and currency swaps that use only observable market data and require little management judgment and estimation.
Placement and balances with
Observable prices and model inputs are usually available in the market for listed debt and equity securities, exchange traded derivatives banks 8 337,777,101 - 337,777,101 - 337,777,101
and simple over the counter derivatives like interest rate swaps. Availability of observable market prices and model inputs reduces Treasury bills 9 181,247,295 - 181,096,803 - 181,096,803
the need for management judgment and estimation and also reduces the uncertainty associated with determination of fair values.
Availability of observable market prices and inputs varies depending on the products and markets and is prone to changes based on Trading and available-for-sale 10 1,383,208,496 1,040,673,936 342,534,560 - 1,383,208,496
securities
specific events and general conditions in the financial markets.
Held-to-maturity securities 11 2,090,794,340 1,054,490,669 1,060,412,035 - 2,114,902,704
For more complex instruments, the Bank uses proprietary valuation models, which usually are developed from recognized valuation Loans to banks 12 138,812,046 - 138,812,046 - 138,812,046
models. Some or all of the significant inputs into these models may not be observable in the market, and are derived from market prices Loans to customers 13 1,909,046,482 - - 1,909,046,482 1,909,046,482
or rates or are estimated based on assumptions. Valuation models that employ significant unobservable inputs require a higher degree
of management judgment and estimation in determination of fair value. Management judgment and estimation are usually required for Total financial assets 6,040,885,760 2,095,164,605 2,060,632,545 1,909,046,482 6,064,843,632
selection of the appropriate valuation model to be used, determination of expected future cash flows on the financial instrument being Customer deposits 18 5,747,654,883 - - 5,747,654,883 5,747,654,883
valued, determination of probability of counterparty default and prepayments and selection of appropriate discount rates.
Due to banks and financial 19 236,967,285 - 236,967,285 - 236,967,285
institutions

Debt securities issued 22 63,543,076 - 63,543,076 - 63,543,076
Subordinated debt 23 49,096,696 - 49,096,696 - 49,096,696
Total financial liabilities 6,097,261,940 - 349,607,057 5,747,654,883 6,097,261,940

31 December 2023 Note Carrying Amount Level 1 Level 2 Level 3 Total
Placement and balances with 8 342,462,320 - 342,462,320 - 342,462,320
banks
Treasury bills 9 136,864,848 - 136,918,438 - 136,918,438
Trading and available-for-sale 10 1,108,565,120 948,148,904 160,416,216 - 1,108,565,120
securities
Held-to-maturity securities 11 2,170,817,396 1,099,563,287 1,045,051,662 - 2,144,614,949
Loans to banks 12 134,830,538 - 134,830,538 - 134,830,538

Loans to customers 13 1,694,028,984 - - 1,694,028,984 1,694,028,984
Total financial assets 5,587,569,206 2,047,712,191 1,819,679,174 1,694,028,984 5,561,420,349

Customer deposits 18 5,479,014,067 - - 5,479,014,067 5,479,014,067
Due to banks and financial 19 159,424,037 - 159,424,037 - 159,424,037
institutions

Debt securities issued 22 34,072,463 - 34,072,463 - 34,072,463
Subordinated debt 23 52,182,032 - 52,182,032 - 52,182,032
Total financial liabilities 5,724,692,599 - 245,678,532 5,479,014,067 5,724,692,599

The fair value of foreign exchange contracts approximates their carrying amount, which is disclosed in Notes 16 and 21. The Fair value of loans to
customers and customer deposits approximate to their carrying value either due to interest rates approximating the market rates or due to short term
maturities.

23 BANKA KOMBËTARE TREGTARE