Lending returns to growth in February

TIRANA, April 5 – After a slowdown in January 2011, total lending in February 2011 rose by 4.8 billion lek (48 million dollars) compared to the previous month and 40.5 billion lek year-on-year. The latest data published by the country’s central bank show total lending in February 2011 was up 8.5 percent compared to February 2010 but only 1.1 percent compared to January 2011. Lending to businesses had the major contribution in the total credit growth with a 4.1 billion lek increase compared to January 2011 and a 37.6 billion lek increase compared to February 2010, accounting for 70 percent of total credit. The majority of business loans are granted in Euro, which accounts for 66 percent of total lending of 334 billion lek. Second comes the national currency, lek, with 27 percent of total lending.
The majority of business loans are taken to finance purchase of equipment and real estate.
Lending to businesses had almost remained frozen from May to October 2010 when it increased by a total of only 10 billion lek but saw a boost in the fourth quarter of 2010 when standards were eased. The “Trade and repair of cars and household equipment” held one-third of the total business loans, with 114.7 billion lek at the end of February 2011. The loan portfolio in this group increased 14 percent year-on-year. Second came lending to the crisis-hit construction sector whose lending rate increased by 8 percent, 4.5 billion lek y-o-y in Jan. 2011. The processing industry ranks third with 14 percent of the total loans.
Lending to individuals in February 2011 slightly increased by 628 million lek compared to January 2011 but was up 3.7 billion lek compared to Feb. 2010. Even for individuals, the majority of loans are granted in euro, mostly for home purchase.
Meanwhile, total deposits in February 2010 dropped by 2.6 billion lek compared to January 2011 but were up 10 billion lek year-on-year.