Private banks erase ALL 11 bln nonperforming loans from their balances

Based on a new regulatory issued by the Bank of Albania, second tier banks have erased about ALL 11 billion non-performing loans from their balances since January of this year, for the first time. The regulatory came in the framework of a national plan for the decrease of nonperforming loans’ level and foresees that private banks should deactivate from their balances every nonperforming loan which has been declared as such before the past three years.

Bank of Albania experts inform that although private banks will clear their balances from these outstanding loans, they will still seek to recuperate their money. Such move from private banks affected in the decrease of nonperforming loans’ level in the beginning of this year and in the increase of lending portfolio by banks.

By the end of June of this year, the level of nonperforming loans decreased to 20.3% from 22.7% that were registered in the first quarter of the year. Bank of Albania aims to reduce the level of nonperforming loans below 20% by the end of this year and according to experts this objective can be reached on projections made based on the current figures.

News source/photo credits: ATA