How much were loans affected by the exchange rate? - BoA: The strengthening of the lek led to a decline in unsecured loans of 23.5% during 2024
During 2024, banks have provided more loans to the private sector than to individuals. Figures show that 60% of the loans were taken by businesses and only 40% by citizens.
But what was this loan used for?
Most of the loan was taken to buy a house. According to the Annual Supervisory Report of the Bank of Albania, almost 27% of the loans granted by banks were used to buy a house by citizens, 24% were taken by businesses for real estate, followed by overdrafts with 13% and loans for the purchase of equipment with about 12%.
Loans for investments in financial instruments have shrunk even further in the past year, accounting for almost no weight at all in all loans granted during 2024. Meanwhile, 10% of the loan was taken by businesses for working capital, approximately 7% was used by citizens to purchase non-durable goods such as food products, and almost 4% for the purchase of durable goods such as household appliances, electronic devices, cars, furniture, and others.
The highest growth during 2024 was in loans granted to individuals for durable goods.
In which period of 2024 did commercial banks grant the most loans?
In March and August 2024, the largest increase in the loan portfolio was recorded, with 14.2 billion lek and 14.3 billion lek, respectively.
The most credited sectors of the economy continue to remain wholesale and retail trade, repair of vehicles and motorcycles with a weight of 30% of the portfolio, followed by the construction sector with a weight of 16.6% and the manufacturing sector with 12.2%.
For 2024, about 55% of the loan is in lek, increasing even compared to 2023. Meanwhile, the share of foreign currency loans, classified as unhedged against exchange rate risk (i.e. when the loan was taken out in euros, but the income was in lek), has shown a decrease of 2.05 percentage points compared to the total foreign currency portfolio, reaching 23.5%, because the lek was stronger against the euro during the past year.
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