Banks are the proudest passport of Albania, and ABI is the largest American investment in Albania
Interview with the CEO of ABI, Andi Ballta
ABI has been mentioned in the contexts of political attacks often over the past two years in several media outlets in Albania. Why do you think this has happened?
ABI is the largest ever American investment in Albania, and NCH Capital is one of the most important foreign investors in the region and beyond. It is a pity that political passions do not spare even sensitive sectors such as banking, or international-caliber investors such as NCH Capital.
For more than two years, ABI has become the object of fake news motivated by political goals, unfair competition, and media thuggery. ABI has so far not responded to such fake news of absurd fabrication to preserve the dignity of the banking system, its clientele and its employees.
We appreciate highly the correct position of the mainstream media, who have also maintained the dignity of the banking system, and, above all, the work of more than 500 ABI family employees, who have gained the confidence of ABI’s clients. We continue to grow despite fake news. It is interesting how each time there is political tension or movement in the banking market, the fake news machine recycles accusations and fabrications that are both irresponsible and harmful to the banking system in Albania.
Fortunately, ABI has all the necessary liquidity and capital, and the support of shareholders and employees, while customer confidence continues to contribute towards improving the banking system.
We started investing in Albania twelve years ago, and have shown patience and foresight in our investment strategy.
When you refer to an American investment, are you referring to the NCH Investment Fund, or do you mean ABI is a US bank?
The American Bank of Investments is 100% owned by U.S. funds and individuals. To avoid any misunderstanding: We are not a bank in America but a bank of well-known American investors in Albania. NCH Capital is based in New York and has nearly 30 years of global investment experience.
NCH Capital has never had any Russian capital, or holdings of any other nation, in ABI’s shareholder structure. NCH simply invested entirely American capital in Russia and Eastern Europe. Also all ABI shareholders are publicly listed and were approved by all regulatory authorities and by the Albanian regulatory authorities in 2010.
It is very easy to find information on NCH or ABI on the U.S. Securities and Exchange Commission (SEC) website, or from the National Registration Center.
It is enough to visit ABI (abi.al) or its Facebook page to see the continuing support of U.S. authorities in Albania or that of the American Chamber of Commerce, whom we thank for this support.
Why is it called American bank when it is registered offshore?
Offshore registration is not about investor location. An American investor can register in a country where the tax system is most favorable. This can be offshore (Cayman) or in the Netherlands, Ireland, or Nebraska.
Many of the most popular companies or financial institutions are registered in countries where taxes are lower. There is nothing illegal or improper, either in the Albanian or international legislation, with the offshore registration of investors at the time investors are declared.
The entire list of ABI investors is stated to the Albanian regulators following all the rules, at various times and whenever required. NCH Capital’s fund investors are the most popular and largest pension fund in America, funds of the most famous universities in North America and also the most prestigious financial entities.
The same shareholding structure was used by NCH Capital, as the main shareholder of ABI, to register banks currently owned in Romania (Libra Bank), Ukraine (Agroprosperis Bank), and Moldova. It is the first time that we face a situation where the origin of NCH funds is questioned. For example, in the NCH Capital Bank in Ukraine, one of NCH investment fund investors is the European Bank for Reconstruction and Development. EBRD has given two loans and has invested EUR 145 million as a partner in a project where NCH has invested USD 2 billion in agribusiness and finance in Ukraine. All these data are in official documents and the information is public and easily verifiable. The mention of offshore recording by various media is a misuse and misinformation of very standard fiscal and tax management with all local Albanian or international rules, including the strict rules of the SEC. The Albanian governments themselves have occasionally promoted “free zones” or “tax holidays” that provide the same fiscal incentives as being located offshore.
As I said earlier, NCH’s investors and funds are the most well-known retirement fund in the U.S., and the private funds of the most popular universities there.
Has ABI ever been in trouble with money laundering policies?
Absolutely never! ABI has had several audits since buying Credit Agricole and has never had any problems with money laundering policies.
On the contrary, we are very proud of the high rating of all audits. We appreciate and thank the full and clear explanations of the Bank of Albania where the information about ABI is complete and up-to-date.
Has ABI reduced its capital?
ABI’s capital has never diminished at any point. On the contrary, it has increased as a result of profits (even this growth information is complete and public in the National Registration Center). The information reported maliciously in some media relates not to the reduction but only to the initial capital paid with the accumulated losses before the acquisition of Credit Agricole Albania by ABI. So, the Bank’s initial capital before the acquisition by ABI was equal to the losses of the period prior to the acquisition by ABI.
This thoroughly technical netting of paid-up startup capital has nothing to do with ABI and was conducted to identify excellent results from ABI’s management over a three-year period where capital has only increased. On the accounting side, this action has no effect on the total capital of the Bank. As stated above, the total capital of the Bank since acquisition in October 2015 has increased by billions of Albanian Lek as a result of profits earned during 2016, 2017, and 2018. We note that this accounting is standard, technical, common and quite irrelevant, and, moreover, had the prior approval of the Bank of Albania.
Today, ABI is one of the most liquid and highly capitalized banks as a result of the positive results of the last three years. Anyone can ask and receive information from the Bank of Albania, the Banking Association or other public, independent and transparent sources. We are well aware of the correctness in providing this information to anyone who is interested in inquiring, and appreciate the full and correct public or private comments of the Bank of Albania and the aforementioned entities that have been stated fully whenever asked.
Is Linda Rama a shareholder, or has she ever been?
Linda Rama has never been and is not a shareholder, or holder of ABI’s options. Linda Rama has been an independent member of the Board where she has provided a professional contribution with very admirable competences and skills.
Why did Linda Rama leave the Board of ABI?
Mrs. Rama has been on the Board of ABI for three years. The reason Linda was invited to the Board was for her professional skills, my professional acquaintance with her since 1993, being a lady of unquestionable reputation, and the high level of sophistication that a sophisticated investor like NCH seeks to have on its Board. Her removal from the Board is in line with the standards and practices of the financial institutions and the recomposition of the Steering Council. Mrs. Rama is one of two members to be replaced by two outstanding American professionals with long experience in banking and finance. In the framework of a period of three years on the Board and the merger of ABI with NBG it is normal for a board update. We are in the process of approving two new candidates. The issue of Board composition for us has and is very clear, transparent and has been stated over and again for two years. Personally, I was deeply saddened by the attacks made to a professional career woman such as Linda Rama. However, Mrs. Rama is no longer a member of ABI’s Board and perhaps the time has come for closure of this over-worked topic.
Mr. Rama said there was concern from US authorities?
What we can say is that the main concern of U.S. representatives in Albania is the duty of all institutions and individuals to protect and stimulate all foreign investors and certainly those that are American. The U.S. has been Albania’s best friend for 100 years.
An American investor is a very good thing for Albania and the banking system. The role of ABI in the banking system has been only positive, especially in improving the performance of banks with poor performance and lowering bad credit. When we bought Credit Agricole, the level of bad credit of the bank was almost 40%. In two years, we lowered this indicator to 4%. These results are also due to work, support, and the American culture of doing business.
There have been attacks, most recently by Mrs. Kryemadhi, regarding the way the Bank was licensed. She in fact says that the Bank of Albania should clarify… the same concern as Mrs. Tabaku’s of some time ago.
I do not want to go into naming specific politicians. However, how the Bank was licensed was explained by Governor Sejko in Parliament, and the Governor fully and correctly explained that ABI entered the market by buying a small second-tier bank, and that we have grown according to all the procedures and rules of transparency monitored by the Bank of Albania, including all details of the shareholding structure and origin of funds or investors.
Politics often has its own objectives and strategies to become popular, but I think foreign and international investors and sensitive sectors such as banking should be kept out of politics.
I repeat that ABI has no institutional agenda or preference. ABI employees and clients are sympathizers or members of different parties and it is time for the banking system to be left out of political attacks.
Are the main shareholders in New York informed of this situation?
Of course, yes. There is a surprise and annoyance since it is not serious that in a country that is friend to the U.S., the only target of some politicians is a U.S. bank that neither had nor has any political agenda. We always support different municipalities (Gjirokastra or Shkodra) where local leaders are from different parties.
I would prefer it if politics were to defend a small business, particularly a bank, and we have for a long time chosen not to respond, to preserve the dignity of the bank and the banking system. It is not that the attacks have affected the Bank or its activity, but they have attracted negative attention from foreign investors and have concerned American authorities that are following the performance of U.S. businesses in Albania.
How do you see the future of the banking market? Is it transparent, and do you see a crisis on the horizon?
I think that the banking system is one of the most stabilized markets in Albania and the most modern. It is a well-regulated market and I think Mr. Fullani, and then Mr. Sejko, have shown seriousness in maintaining the system. The banking system is more serious, with more qualified employees and more transparent structures. We have highly liquid banks and successful domestic operators.
ABI has just completed an audit by the Central Bank, while other banks have also entered a program of checks by the Competition Authority that I do not see as negative as they are presenting. The checks are a procedural obligation and I believe that our banking market is the best in the region. Let us not forget that the banking system in Albania did not get any help during and after the financial crisis in contrast to many other countries. Albania can be proud of this. Banks are the most proud passport of Albania at the moment.
Where is the power of the banking market in Albania?
Banks trust the Albanians, and Albanians believe in the banks. A strong factor is our emigrants in Italy and Greece. The neighboring markets have different interests from the banking market in Albania, and we are favored at this point because many migrants deposit money in Albania as they see it as the safest. Business is also very familiar with banks, and working through the bank. Simply it is a society that loves banks, accepts them and trusts them. And this makes a safe market. Commercial banks today have a high level of deposits and are exploring where to invest. This is a sign of their vitality.
Will you try to buy other foreign banks if they are sold?
Of course we are open to increasing our presence in the Albanian banking market. We are here to grow and make the system competitive, safe, and useful to society. I would like to emphasize that we see as a positive phenomenon the expansion of Albanian-owned banks and one in line with the historical trends of the most developed banking systems.
For more information on ABI Bank, board members and NCH Capital: