The level of nonperforming loans seems to have decreased significantly and continues to decline steadily, according to the latest statistics issued by Bank of Albania.
In May of this year, the level of nonperforming loans decreased to 21.8%, the lowest level in the three last years, according to the Bank. This positive shift in the banking system has come as a result of several legal measures applied by the Bank of Albania, which plays the role of a regulatory in the market.
The decrease of nonperforming loans is having a positive impact in general terms in the country’s financial situation, as shown by Bank of Albania’s statistics. Unaudited figures published by the Albanian Association of Banks show that the aggregate result of 16 private banks for the first five months of 2015 resulted positive, at an amount of ALL 7.5 billion. Compared to the same period of 2014, the profit of the banking system in overall increased by 53%, according to these figures.
The Bank of Albania treated the problem of nonperforming loans gingerly, given that a possible increase of these loans would harm heavily the economy of Albania.
In the framework of measures for boosting lending, the Bank of Albania eased the restructuration of nonperforming loans, without considering them as bad loans immediately. The Bank also predicted the amount of time needed that banks to erase from their balance the nonperforming loans, which was set no longer than three years.
The Bank of Albania stressed in press releases that a new national plan is being compiled in order to reduce the level of nonperforming loans.
News source: Scan TV
Photo credits: geralt / Pixabay
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