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Market share of the largest banks drops to historic low

2026-02-17 22:53:55, Ekonomi CNA

The market share of the three largest banks in the country has reached its lowest historical level.

Bank of Albania statistics show that at the end of 2025, the three largest banks in the sector owned 55% of total banking market assets, down from the level of 55.86% they held a year earlier.

The market share of the three largest banks is also declining for the very important indicator of deposits. Together, the market share of the three largest banks has fallen to 45.02%, from 46.17% a year ago.

The market share held by the three largest banks in the country (currently Banka Kombëtare Tregtare, Banka Credins and Raiffeisen Bank Albania) has currently dropped to historic lows.

The market share held by the two largest banks is also declining. At the end of 2025, the weight of the two largest banks to the total assets of the sector decreased to 40.59%, from 41.15% a year earlier. Meanwhile, for deposits, the market share of the two largest banks has decreased to 33.4%, from 34.25% a year earlier.

In 2018, the banking sector began a consolidation cycle that gradually reduced the total number of banks. From 16 banks operating in the market in 2018, their number has currently decreased to 11.

Compared to 2018, the market share of the two largest banks has decreased by 4.3 percentage points, while the market share of the three largest banks has decreased by 3.4 percentage points.

Despite the reduction in the number of banks in the market over the past five years, market concentration indicators remain within the threshold of competitiveness, based on theoretical assessment methods. The most common way to measure the degree of market concentration is the Herfindahl-Hirschmann Index (HHI), which is constructed as the sum of the market shares, raised to the square power, of each firm. The threshold below which a market is generally accepted as competitive is 1500 or 0.15.

According to data from the Bank of Albania, at the end of last year the HHI indicator, measured by total assets, was at 0.14, at the same level as the previous year. Meanwhile, at the end of 2018, this indicator had been at 0.16. The slight decline over the past seven years essentially indicates a lower market concentration and improved competitiveness.

The entry of new investors and the cycle of acquisitions in the banking sector, which took place mainly in the period 2015-2022, has generally had positive effects in terms of competition.

Although mergers between existing banks have reduced their overall number, they have created larger and more competitive banks. In particular, banks that have emerged from mergers and acquisitions have been among the fastest-growing entities in the market in recent years.

Meanwhile, this year, two new actors are expected to enter the market, which have received prior authorization for licensing from the Bank of Albania, namely the branch of Ziraat Bank in Albania and Banka Jet./ Monitor.al