Profit of the banking system / 8 billion ALL for the five-month period of 2019
The Albanian banking system closed the first half of the year with a profit of ALL 8 billion. According to the data of the Bank of Albania, the profit of the system grew by 5% compared to the same period of the previous year. Return on equity at sector level reached 13.3%, roughly one percentage more than in the previous five months.
The financial performance of the banking system in recent years appears to be stable and a decisive impact has resulted to be a decline in the ratio of non-performing loans.
At the end of May, the ratio was about 11.4%, about two percentage points lower than the same period a year earlier. The decrease in this indicator has stabilized the provision expense, with a positive impact on the financial result of the banks.
Even the results of the first quarter of the year, published by the Banking Association, showed that profits this year were scattered across most banks. 12 of them closed the first quarter with profit and only one with a loss.
Even capitalization of the banking system remains high. The capital adequacy ratio at the end of the first quarter of the year was almost 18%, from 12%, which is the minimum threshold required by the Bank of Albania.
After a long process of restructuring and concentration, the banking system is more solid and healthier, creating preconditions for a higher credit offer for the economy.
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