Page 101 - economic report 2021

furlough scheme. Remember that from July 2021, these temporary employment support measures
only focussed on a few sectors directly affected by restrictions or impediments to normal activity.

Businesses’ views about the first half of 2022, expressed in the survey, maintain an optimistic
stance. Retailers predict that business activity will continue to improve and anticipate an increase
in the volume of sales in all branches of commerce.

2. The financial system

The sector of financial activities and insurance, with the banking system at its core, represents
12.3% of Andorran GVA, according to 2020 data. In the last year, this sector’s value to the economy
increased because it was not as affected by the pandemic as other activities in the services sector.

Financial activities and insurance are an important sector of the economy in terms of GVA, while in
terms of employment they represent 4.7% of total employees (2021). The main business areas in
the financial sector are private banking and asset management; retail banking, both for individuals
and for businesses, and insurance.

According to official GDP data published by the Government, in 2021, financial, real estate,
professional and technical activities saw an increase in GVA of 9.1%, contrasting with the 3.9%
decline in 2020, which means that they exceeded pre-pandemic figures.

In the last decade, the sector has had to address
AGGREGATE DATA FOR THE constant changes in regulations to adapt to
ANDORRAN BANKS Table 12.5 international standards, both on tax transparency 99

Thousands of euros 2020 2021 and in the sphere of combatting money
Total assets 15,169,956 16,611,905 laundering and terrorism financing, payment
Gross lending 6,367,736 7,031,054 methods, and banking regulations in general. To
Assets under management 51,735,224 61,461,234 these efforts is added their collaboration with
Prof t/(loss) 83,609 97,419 the Government in the process of implementing
measures to tackle the consequences of the
ROE 5.46% 6.04%
ROA 0.55% 0.60% pandemic, providing the necessary liquidity to
Ef ciency rat o 66.78% 68.35% guarantee the sustainability and development
(Cost to income rat o) of the national economy.
Default rate 4.49% 3.74%
CET 1 solvency rat o 18.00% 17.00%* Despite the change in business model seen
(phase-in) in the banking sector over recent years, in
Liquidity rat o 187.12% 206.06%**
(Liquidity Coverage Rat o) 2021 the number of employees for the whole
of the financial sector remained fairly stable
* European bank average according to EBA data: 15.40%. at 1,765. The average wage in this sector,
** European bank average according to EBA data: 174.70%.
which is the highest for all sectors of the
Source: Andorran Banking from the annual reports of banking inst tut ons.
Andorran economy, reached about €4,760.
As for the business network, there were 201 The Andorran economy: developments in the main sectors | XII. Services
establishments, practically the same number as in 2019.

If we consider only the national banking institutions, the number of employees in 2021 for the
whole Andorran banking system was 2,579, of which 1,337 work in Andorra (1,378 in 2020).

2021 was a year of recovery for the financial sector, leaving behind the economic consequences
of the pandemic. Andorran banks ended 2021 with an aggregate profit of €97.4 million, close to
the pre-pandemic level, and a volume of assets under management of €61,461 million, 18.8%