Crisis “Erased” – The banking system in Albania is recovering losses

The increase in profits in recent years has considerably reduced the weight of the losses carried forward into the equity structure of banks.

Bank of Albania’s statistics show that at end of 2015, carryovers accounted for approximately 21% of banks’ share capital.In the middle of this year, their share to share capital fell to less than 4%.Figures show that the growth of financial performance in the last two years is depreciating the effect of crisis period on bank balances.

Due to the rise in non-performing loans, some banks in the system faced significant losses. But in recent years the credit quality portfolio stabilization has helped balance the sheet and recovery the losses of previous years.According to the Bank of Albania last year, the banking system’s profits hit the record high of ALL 22 billion.

Also, for the first half of this year the result was again high, with ALL 11 billion in profits.Reduction of expenses for the reserve fund of bad credit losses has been a determining factor in the results of the last two years.The ratio of non-performing loans was stabilized at the level of 13%, while the new provision for balance provisioning decreased drastically.

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