Bank profits decrease during November 2016

Profits of the banking system declined in November. According to the data of the Albanian Association of Banks, progressive profit for 11 months fell to about 7.25 billion, from 8.3 billion that was for 10 months.

Meanwhile, compared with 11 months of 2015, the profit of banking system halved. Although the system remains profitable, as expected, 2016 brought a downward correction of earnings.

The main reason seems to be the significant reduction of interest rates. Especially during the 9-month period, the decline was more pronounced in the instrument of government debt interests, which constitute about 30% of banking system assets.

While on an average, the interest decline has been significant even in  loan interests. The decline of interest has been stronger in the segment of individuals, where the new bank lending is concentrated more in 2016.

In an absolute value, higher profits remain concentrated in a few large banks, while the profit of the most banks system is minimal. Return on equity for November dropped further at 6.1%, while return on assets at 0.6%.

During November was recorded a significant reduction in the level of loan problems with 1 point percantage, bringing this indicator to 20.4%. However, loans with problems remain a restraining factor for the expansion of credit and profitability of the banking system.

*Material i përgatitur nga portali SCAN. Ripublikimi mund të bëhet vetëm kundrejt citimit të autorësisë dhe burimit origjinal.