Savings and credit unions suffer losses

TIRANA. Nov. 14 – Savings and credit unions suffered a shrink in profits during the first half of 2012 on rising bad loans and an increase in provision coverage rates, according to a Bank of Albania report. Central bank data show the two savings and credit unions operating in microcredit in Albania suffered a loss of 36 million lek in the first half of the year compared to a profit of 9.6 million lek at the end of 2011. Total assets at the end of the first half of 2012 rose to 9.9 billion lek up 255 million lek year-on-year. Lending also rose by 4.5 percent to 7.2 billion lek while non-performing loans climbed to 5.36 percent, up from 4.54 percent during the first half of 2011. Albania has two savings and credit unions and 126 credit saving companies, according to central bank data.
Last summer, deposits in savings and credit micro-finance institutions were also included in the insurance scheme. Under the changes, deposits up to 2.5 million lek (Euro 17,900) in both commercial banks and credit saving unions will be insured by the Deposit Insurance Agency.
The non-banking financial sector, composed of financial institutions supervised by the central bank and the Financial Supervisory Authority, represented 4.7 percent of the GDP at the end of 2011 compared to 4.9 percent in December 2010.
The sector is dominated by non-banking financial institutions whose assets account for 2.9 percent of the total, followed by insurance companies at 1.5 percent, credit-saving unions at 0.8 percent and the private pension funds at their initial stages representing only 0.01 percent of the GDP.