Data published by the Bank of Albania on Friday showed that non-performing loans accounted for 3.77% of total outstanding credit in May, up marginally from 3.75% in April.

On an annual basis, however, the ratio declined from 4.12% in May 2025, reflecting continued improvement in banks’ loan portfolios.

In absolute terms, the stock of non-performing loans stood at around 36.4 billion leks at the end of May.

The central bank’s data indicate that asset quality remained strong even as bank lending to the economy continued to expand.

/e.xh/r.e/u.sh/

According to the Bank of Albania, the ratio edged down from 3.85% in January and also fell on an annual basis, compared with 4.06% recorded in February 2025.

The level represents the lowest NPL ratio in the past 18 years, reflecting continued improvement in asset quality in the banking sector.

The stock of non-performing loans stood at around 36 billion leks at the end of February, the central bank said.

e.xh/j.p/u.sh/

According to the Bank of Albania, the banks NPL ratio also fell 0.375 year-on-year from 4.17% in December 2024.

The decline reflects improved financial stability, better lending quality, and stronger bank capacity to support the economy, the central bank said. Non-performing loans on commercial banks’ balance sheets totaled 358 million euros.

The drop of the NPL ratio to a historic low is linked to stronger economic activity, more stable incomes, improved financial management by households and businesses, and the depreciation of the euro against the lek, central bank added.

Meanwhile, total bank lending rose to 9.4 billion euros at the end of 2025, up from 8.3 billion euros in 2024, driven by strong demand from businesses for investment and households for home purchases.

e.xh/j.p/u.sh/

On a year-on-year basis, the ratio declined by 0.29 percentage points from 4.48% in November 2024, the central bank said.

Lower interest rates on both foreign-currency and Lek-denominated loans have supported borrowers’ ability to meet repayment schedules, contributing to the improvement, according to the Bank of Albania.

In absolute terms, NPLs totaled 38.8 billion leks in November, down from 39.6 billion leks a year earlier.

The central bank said Albania’s banking sector’s performance remained strong, supporting an expansion in credit supply with a direct impact on economic growth.

The NPL ratio hovered around 4% for most of 2025, marking its lowest level in the past decade, compared with a peak of about 25% in September 2014, the bank said.

/e.xh/a.f/u.sh/

Despite the monthly increase, the ratio remains below last year’s level of 4.61%, maintaining a downward trend.

Total bad loans stood at 37.7 billion leks, up from 34.9 billion leks at the end of 2024 and 37.5 billion leks a year earlier, the central bank said.

Overall lending to the economy surpassed 900 billion leks at the end of August, reflecting continued credit expansion.

e.xh/j.p/u.sh/

Despite the minor month-on-month fluctuation, the NPL ratio continues to follow a downward trend on an annual basis.

In July 2024, the rate stood at 4.72%, reflecting improved credit quality and stronger loan portfolio performance across the banking sector.

The central bank’s report, “Financial Soundness Indicators, July 2025”, shows that the stock of non-performing loans dropped to 36.1 billion lek, compared to 37.7 billion lek in the same period last year.

e.xh/j.p/u.sh/

The June figure was down from 4.12% in May and is the lowest level since 2008, according to the central bank’s Financial Soundness Indicators, June 2025 report.

The decline reflects both an improvement in borrowers’ financial health and rapid loan portfolio growth, which reached 892.7 billion leks at the end of June, about 12 billion leks more than in May.

NPLs started the year at 4.12% in January, dipped to 4.06% in February and 4.02% in March, before fluctuating slightly in April and May and reaching June’s new low, central bank said.

/a.f/u.sh/

According to central bank data, the NPL ratio also fell 0.59% year-on-year in November 2024.

The continued decline in NPL ratio is driven by improved borrower repayment capacity, the economic activity, the write-offs and more cautious lending by banks, contributing to a more secure financial environment.

Central bank notes that the bad loans stock has hit record low in the last 16 years.

According to BoA data, the total portfolio of bank lending to economy reached 332 billion lek until November 2024, lead by the real estate sector, construction and tourism.

/a.f/r.e/u.sh/

Central bank said that the total value of non-performing loans is estimated at 37.4 billion lek from 38.4 billion lek in August 2023 and the NPLs ratio keeps maintaining a downward trend.

On annual basis, the NPLs ratio fell 0.69%.

The fall in NPLs ratio was driven by the bad debt deduction and settlement.

On the other hand, the country’s banking sector has performed positively with net profits hitting records high, driving the loan offer up with a direct impact on growth of national economy.

According to Bank of Albania, the loan portfolio totaled at around 41.4 billion lek, recording an annual increase of 42% in the end of July.

/j.p/u.sh/

The NPL ratio at the end of March edged down on an annual comparison basis, from 5.15% in the same month of 2023, the central bank said in a data release.

Central bank noted that the non-performing loans ratio has been pursuing a downward trend since 2016 and has hit the lowest level since 2008.

The improvement of lending quality to the economy is being supported by the upward trend of the Albanian economy with high growth rates of the real estate and tourism sectors. BoA noted that appreciation of the national currency lek has also played a positive role in cutting the NPL ratio.

According to central bank, increased lending to economy and accelerated expansion of the loan portfolio have also contributed to the fall in the NPL ratio.

Lending portfolio for the economy was estimated at around 763,2 billion lek at the end of March or 13 billion lek more than a month earlier.

/r.e/u.sh/