Banking units in Albania reduced to 503 in 2016: In decline since 2012

Banks continued to reduce the number of their branches and agencies last year. According to data released by the Bank of Albania, the number of bank branches in 2016 went down to 503, from 518 that it had been a year earlier.

In recent years, banks are facing high costs and declining profitability, especially due to the high level of non-performing loans.

This has prompted them to tighten the policies of expansion, and even to close a good part of inefficient branches.

Since 2012, the number of bank branches and agencies has fallen by 53 units.

Along with the need to reduce costs, the shrink the branch network will also be a necessity in the business model in the long term, given the expanding role of technology in society and economy.

The expansion of remote services via Internet and mobile phones will reduce the necessity of an extended physical presence of bank branches.

However, Albania is still lagging behind regarding mass distribution of remote banking services, and, compared with other countries, the country has a low penetration of banking units.

According to the World Bank, in 2015 Albania had 21.9 bank branches per 100 thousand inhabitants, holding the penultimate place in the region, leaving behind only Kosovo.

Other countries have a concentration of bank branches in the interval between 25 and 30 branches per 100 thousand inhabitants, with the exception of Montenegro, where the density of banking units is much higher, with 43 per 100 thousand inhabitants.

SCAN

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