Albania's second-tier banks write-off 32 bln leks lost loans in 18 months

From the beginning of 2015 through June this year, the second-tier banks operating in Albania have written-off from their balance sheets non-performing loans (NPL) worth 32 billion leks (about 260 million U.S. dollars), data from the Bank of Albania showed Tuesday.

The central Bank adopted a new regulation at the beginning of 2015, under which the second-tier banks had to write-off the loans which had been classified as lost for more than three years.

The move led to the significant decline in the level of non-performing loans in the Albanian banking system, falling down to 18.2 percent at the end of last year, the central bank's data showed.

Data also showed that about 27 billion leks (218 million U.S. dollars) were written-off only during 2015.

The bad loans write-off in first half of 2016 proved insufficient to cut down the level of non-performing loans during this year and this is why the index of NPL amounted to 21.2 percent at the end of July.

However, the central Bank expected accelerated rates of write-offs in the upcoming months.

This is based on more optimistic projections for the performance of bad loans expected to drop until the end of this year, according to the Bank of Albania experts. Endit