Non-performing loans in Albania – 11.2% at the end of June
The ratio of non-performing loans registered a slight decline again in June. According to data from the Bank of Albania, this indicator dropped to 11.2%, from 11.4% in May. Compared to the same period last year, the level of non-performing loans is two percentage points lower. Credit portfolio quality is improving, albeit at a slower pace. Until last year, there was a significant effect of off-balance sheet loans and loans. Since 2015, it is estimated that banks have deleted over ALL 55 billion of lost loans from their balance sheets.
This process has gradually exhausted its influence and now the decline in the ratio of non-performing loans is coming more as a result of repayments and restructuring, but also by the increase of the total loan portfolio to the economy. The organic improvement in the loan portfolio quality is also evidenced by the performance of non-performing loan reserve fund expenditures. In the first half of last year, the provisioning system expenditures had been ALL 1.3 billion. This year, this item is positively valued at around ALL 500 million, indicating that banks have recaptured provisions from previous periods.
Increasing the loan portfolio is also having a positive effect. In the middle of this year, credit to the Albanian economy reached the value of ALL 553 billion, up by 4.2% compared to the same period a year earlier. Increasing the total portfolio affects the reduction of the specific weight of non-performing loans.
*Material i përgatitur nga portali SCAN. Ripublikimi mund të bëhet vetëm kundrejt citimit të autorësisë dhe burimit origjinal.