Around 1.2 billion lek of loans were restructured by banks - BoA: Less than last year. Businesses were the ones that requested maturity extensions
Banks restructured fewer loans in the first half of the year. According to data from the Bank of Albania's Financial Stability Report, the amount of restructured loans was lower than last year.
Specifically, the restructured loan during the period was around 1.25 billion lek or less than 1% of the new loan flow of the period and as much as 3.5% of the stock of non-performing loans.
Banks can restructure a loan to ease the heavy burden that a borrower may have. So the bank offers borrowers some facilities, due to the financial difficulties they may encounter during the repayment process. These facilities include changes in the terms and conditions of the loan, such as changing the product and capitalization of interest, the maturity period and the interest rate, the execution of collateral or other assets for partial payment of the loan, the replacement of the original borrower or the inclusion of an additional borrower.
The annual flow of restructured loans has decreased in recent years. Thus, the value of restructured loans during the first half of 2025 is 23% of the value of restructured loans in the same half of 2021.
The restructuring was carried out mainly for loans in lek and foreign currency of the business sector. The latter have mainly requested an extension of the maturity period.
What about write-offs of lost credits?
Write-off volumes were much higher than in the previous period, reaching around 5.3 billion lekë. The write-off of bad loans, i.e. those that the borrower can no longer afford to pay, was dominated by businesses. The Bank of Albania reports that the value of loans written off in the recent period was 17.6% of the total outstanding non-performing loans in the banks' portfolio, up from around 2.7% in the previous six months.
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