TIRANA, Nov. 9 – Banks’ profits dropped to about 6.5 billion lek (€46.8 mln) in the first three quarters of 2016 as non-performing loans rose to 21.3 percent.
Central bank data shows banks profits in the first nine months of this year were down by an annual 45 percent as NPLs rose by 0.6 percentage points to 21.29 percent.
Albania’s 16 overwhelmingly foreign owned commercial banks registered historic high profits of 5.7 billion lek (€111.7 mln) in 2015 as non-performing loans dropped to 17.66 percent and deposit interest rates registered a record low.
However, an upward trend in NPLs during this year fuelled by the bankruptcy of some major operators has affected banks’ profits again while credit is still struggling to recover to positive growth rates.
NPLs at 21 percent, down from a record high of 25 percent in mid-2014 are considered a key barrier for the tight lending standards banks continue to apply.
