Loans to businesses account for 70 percent of total lending at the end of June 2011, at a total of 499.2 billion lek.
TIRANA, August 8 – Total lending to both businesses and individuals grew by 10.5 percent during the first half of this year, confirming the Bank of Albania survey results about the tight lending standards banks are applying as bad loans are registering record high levels.
Latest data published by the Bank of Albania show lending to businesses during the first half of this year rose by 51.7 billion lek (USD 517 million) or 12.3 percent year on year.
Loans to businesses account for 70 percent of total lending at the end of June 2011, at a total of 499.2 billion lek.
The majority of around 64 percent of business loans are granted in Euro, putting Albanian consumers at risk of facing negative currency exchange risks especially those with revenues in the Albanian currency lek. Lending in lek for businesses accounts for only 28 percent of the total credit for businesses. Around 8 percent of credit portfolio for businesses is in the US dollar.
Meanwhile, credit to individuals during the first half of this year continued its slow growth rising by 5.6 percent year-on-year. Credit in Euro accounts for 55 percent of loans granted to individuals while credit in lek for 43 percent.
Around 87 of credit in Euro is taken to invest in real estate. This is explained by prices in Albania’s construction industry which are set in Euro since years now.
Data show that Tirana holds around 74 percent of the total loan portfolio for businesses. The trade repair of cars and household equipment accounts for 32 percent of loans in Tirana, followed by the construction industry with 20 percent and the manufacturing industry with 15 percent.
Meanwhile, deposits in Albania’s banking system continued their growth, confirming citizens’ trust in the Albanian banking system and a saving trend which is proved by falling retail sales.
New deposits in the first half of 2011 climbed by around 110 billion lek or 13.4 percent year-on-year.
