During the month of July, transfers of funds from Albanian banks to destinations outside the country were estimated at 184 billion lek (1.289 billion, $1.727 billion).
TIRANA, Aug. 20 – Albanian banks have enjoyed a three fold increase in their profits during the first half of 2014. As a result, it seems they have also raised their level on investments beyond the borders of the small Adriatic republic.
According to the Albanian Banks Association, profits for the system stood at 5.4 billion lek (38 million, $50 million) in the first six months of the year.
The positive growth in earnings has been driven primarily by the stabilization of non-performing loans and the drastic reduction of provision expenses (funds used to cover non-performing loans), which now stand at their lowest.
The level of non-performing loans has stabilized at 24 percent, same as last year. In total, 12 banks have declared a positive growth during the first half, three of them have recorded losses, and one has yet to release second quarter results.
Banks continue to keep a tight hand on lending to the economy and are using a considerable part of their customers’ deposits to invest on government securities or to transfer them toward banks outside the country.
According to the latest statistics published by the Bank of Albania (BoA), “Relations between banks, credit institutions and other financial institutions,” grew by 4 per cent from December 2013 to June 2014, an estimated value of 18.4 billion lek (128.9 million EUR, $172.7 million dollars). More detailed data from the Association of Banks reveal that one bank above all has become a major contributor in transferring funds abroad, with an estimated total of 11.3 billion lek (79.8 billion euros, $106 million dollars).
In addition, banks have been very active in purchasing government securities. “Treasury bills and other bills eligible for refinancing by Bank of Albania” rose by about 8 percent at the end of June 2014 compared to December 2013, at an estimated 105.1 billion lek (741 million euros, $985.4 million dollars).
Operations with securities has expanded by 3.6 per cent over the same period, to 313 billion lek (2.21 billion, $2.94 billion), according to the source.
Banks see investments in treasury bills or bonds as the best alternative for the moment, one that carries little risk and very low costs. Regarding lending, only three banks have significantly increased their activity. Although citizens have increased deposits in banks, lending has been steadily falling.
