Positive financial results aligned with the activity growth strategy.

1. What is your assessment on the 's performance during 2020? Which are the most significant achievements to be highlighted and the main challenges in your banking activity?

Tirana Bank, represents one of the leading , with a steady and outstanding presence in the local market. It continues to expand its activity referring to the wide customer base, as well as to the commercial development synergies with stakeholders, partners and associates of our Bank and of Balfin Group, the economic target group where we belong to.

During 2020, pursuant to the development strategy, Bank has generated a sound performance in terms of the organic growth of its activity. We have reconfirmed our active presence in the local market, providing dynamic support to the development of the local economy, focused on retail banking and on business entities.

Regarding the main commercial and financial indicators, this growing trend proceeds from the previous year (which coincides with the change of the Bank's ownership structure) demonstrating a higher growth rate compared to the average of the banking system. I am pleased to inform you that Tirana Bank reports a steady annual increase in + 9% in Total Assets/Balance Sheet (versus + 5.5% of the banking system), + 12% increase in the level of customer deposits (versus + 6% of the banking system), loan/investment portfolio growth + 19% (versus + 4% of the banking system). We continue to address with great care the reduction of the non-performing loans level, realizing a reduction of -17% of the respective portfolio, being already within the norms of the banking sector. We also deem it very important for the Bank to continue reporting positive sustainable financial results. Liquidity and capital indicators remain at consolidated levels, which enable a further and sustainable expansion of our banking activities.

2020 was featured by unusual developments, mainly due to the pandemic, but also as a result of the consequences of the earthquake. All economic stakeholders have faced particular challenges, which have clearly affected the economic life in the country; the level of investment and remittances, consumer behaviour and demand for products and services, mobility and business dynamics, etc. However, the coordination of steps between the Albanian Government, the Bank of and the Banking System, in terms of the provided financial support, temporary facilitation of the financial burden for borrowers (in accordance with loan moratoriums,) along with opportunities for restructuring loan obligations (in line with the facilitation provided in the implementation of the regulatory framework), we believe to have enabled easier coping with the financial difficulties caused by the pandemic, by guaranteeing economic life, as well as by supporting for the gradual revitalization of consumption and investment.

2. In your perspective, what were the most important changes brought about by the pandemic in the way of operating/or pursuant to the business model of commercial banks?

Despite the challenges imposed by the pandemic during 2020 which continue up to day, in my opinion, the banking system has rapidly adapted to the situation, aiming maintain consistent services and support level to customers. This is a crucial indicator that the banking system remains the most regulated and dynamic sector, as well as a very important actor in the sustainability of the local economic development.

Organizational measures, mainly referring to the fact that a part of the staff had to work from home, providing the appropriate infrastructure to enable this new form of work, was one of the innovations imposed by the pandemic. Referring to the banking sector as a whole, this new form of work organization can continue in the medium to long term, depending on the trends for optimization of work infrastructure and logistics costs, as well as the technology usage level in various aspects of activity.

During 2020, there has been a significant increase in the utilisation of by customers through alternative banking channels (e.g.: ATM transactions, debit/credit cards, as well as digital platforms, etc.). Debit/credit card transactions of Tirana Bank customers have marked an increase of about +15% compared to 2019, as a preferred payment method by customers to reduce the contact with people and cash, for health and safety issues.

We consider that this increasing trend of using alternative banking channels will continue in the future, not only due to the effects of the pandemic that has conditioned the new consumer behaviour, but also as a result of the increasing pressure of technology penetration in the financial industry.

Significant changes can be made in the business model of banks in the local market, in accordance with the speed and level of penetration of on-line banking services by customers. This is not only an issue related to technological developments, but also to consumer behaviour towards the usage of alternative banking channels.

3. Which sectors or segments credited by your bank have been most affected by the economic crisis? Do you expect a deterioration in the quality of your loan portfolio and, if so, when can this happen?

The decrease in the level of consumption and individual and household investments have also affected the decrease in trade and services volumes, which are the main reason that Gross National Product (GNP) recorded negative levels during 2020.

Important sectors affected by the crisis remain mainly trade (especially in the small and medium business size segments), as well as tourism and hotel services, which are important pillars of the local economy. As a result of a similar downward trend in trade volumes in the region and beyond, transport services have also been negatively affected by this crisis.

Restrictions on the mobility of people, referring to the rules into force mainly by the countries of the European Community, will continue to pose a challenge to tourism, reducing the opportunity for foreign tourists to visit our country during the summer season.

However, we believe that the vaccination campaign will bring about progress in the pandemic situation. The policy of keeping the borders open will enable tourists from the region and beyond to visit our country, reviving our local economy and serving as a signal for the revival of local tourism.

In our opinion, there will not be material growth or disturbing situations with the loan portfolio. The current restrictions, referring mainly to curfew, are not considered essential to the local economy. Based on forecasts from various international financial institutions, 2021 will mark a turning point with expectations for GDP at positive levels.

4. What are your main expectations and goals for the business performance during 2021?

Tirana Bank continues to adhere to the strategic objective of further growth of the activity, with a dynamic approach but also careful in terms of opportunities for development, as well as the risks that characterize the local market.

We will continue to make the most of our presence of the Bank's branch network to continue the natural organic growth, aiming at further expansion of the customer and depositors base, as during the last 2 years.

The healthy liquidity situation offers us the opportunity to expand the lending portfolio for individuals, for their mortgage and consumer loan needs, as well as to support various and dynamic business sectors.

Referring to the development strategy, we will also assess the opportunities that may arise in the short to medium term, as a result of the consolidation process in the banking/financial sector, aiming to expand our presence in the local market. We are also in the process of obtaining relevant approvals from the regulatory authorities regarding the opening of a Bank branch in Kosovo, initially through a representative office.

Tirana Bank will remain an important stakeholder in the banking sector, with a clear orientation to continue supporting the development of the local economy.