Financial Stability Report: In the second half of 2025, bank profits were declining
The Supervisory Council of the Bank of Albania approved today the Financial Stability Report, one of the important periodic documents prepared by the BoA. According to this document, the assessment made of the country's economy and finances as well as the recommendations for the future are as follows:
“The Bank of Albania assesses that in the second half of 2025, the activity of the financial system developed in a stable manner. The expansion of banking sector activity accelerated, with the main contribution from increases in deposits and capital, which were mainly oriented towards lending and investments in securities. The net financial result of the banking sector was positive and somewhat lower than that of the previous year. The risks arising from the interconnections between the banking sector and other segments of the financial system, as well as those of the banking sector's own activity, are assessed at controlled levels. Financial resilience indicators and stress test exercises show that the banking sector is resilient to the identified risks. However, it remains necessary for banks to strengthen their risk prevention and management systems, to regularly test their resilience to them, and to maintain appropriate levels of activity capitalization.
Economic developments during the period were positive, influenced by the good performance of consumption and investments, and the sustained positive performance of the tourism sector. Economic growth was accompanied by a decrease in unemployment and an increase in employment and wages. Fiscal policy remained prudent and the share of public debt in Gross Domestic Product (GDP) continued to decline. Inflationary pressures have remained below the Bank of Albania's target. Risks to economic and financial developments in the country remain present and are mainly related to the high uncertainty currently posed by international developments. In these conditions, it remains important that the economic and financial policies of public authorities and the actions of market participants aim to preserve financial reserves and effectively manage their investments.
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