Banking system performed well during September 2019 as deposits and loans increased

Tirana Times
By Tirana Times October 30, 2019 12:52

Banking system performed well during September 2019 as deposits and loans increased

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  • According to the BoA’s statistical data, the stock of deposits by the end of September amounted to 8 billion euros, increasing slightly by 12 million euros in comparison to the month of August

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TIRANA, Oct. 30 – The banking system performed well in September as deposits increased and loans expanded significantly. According to the data provided by the Bank of Albania, the loan stock for businesses and individuals amounted to 4.5 million euros at the end of September, increasing by 0.9 percent in comparison to the previous month. The expansion of loans in September was due to corporate loans, mainly in lekë (+1.7 percent on a monthly basis), though the foreign currency had a positive trend as well, precisely at a +0.5 percent on a monthly basis.

Individual loans increased as well, but mainly in lek (+1 percent on a monthly basis), as banks usually recommend taking out loans in the currency equivalent to that of their income. On an annual basis, from September 2018 to September 2019, loans increased by 5.7 percent. This seemed to be a recovery from the negative performance of the last two years. Both businesses and individuals influenced the increase of loans. Positive factors during this period were the stability of the euro as well as the downtrend of hiding non-performing loans in the banks’ balance sheets; data on loan currency is reported in lekë and the underpricing of the euro last year reduced the currency stock.

The trend of deposits proved positive during September as well, but at a slow rate compared to the previous month due to the seasonal remittances. According to the BoA’s statistical data, the stock of deposits by the end of September amounted to 8 billion euros, increasing slightly by 12 million euros in comparison to the month of August. This trend was fully influenced by savings in the foreign currency.

On an annual basis (September 2018 to September 2019), deposits in the banking system increased by 2.6 percent, again due to savings in the foreign currency (mainly euro). Individuals on the other hand showed reluctance in making time deposits in lekë, due to the unfavorable interest norms. During September 2019, the stock of individual time deposits declined by 7.1 percent compared to September 2018, comprising only 22 percent of the total deposits compared to 40 percent in January 2013.

The weight of deposits in foreign currency was at 55 percent in September 2019 compared to 48.7 percent in January 2013, indicating a dominance of foreign currency deposits, mainly in euro.

 

 

Tirana Times
By Tirana Times October 30, 2019 12:52