Profits of the banking system decreased by 36% compared to last year
The banking system is making lower profits this year. According to data from the Bank of Albania, for the first five months of the year, commercial banks reported a common financial result in the amount of about 5.1 billion ALL, a significant decrease from the value of almost 8 billion ALL that was recorded for the same period of a year ago.
As the Bank of Albania has decided to freeze the reclassification of loans until the end of August, the non-performing loan ratio has not increased, and has even declined slightly. But despite this, the profitability of the banking system has been declining since the first half of the year. Further, the severe Covid-19 crisis will significantly affect the ability of borrowers’ payers and is expected to bring an increase in the ratio of non-performing loans over the coming months.
This will also worsen the financial performance of banks. However, the system looks solid and healthy.
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