Bad loans, new minimum/ Drop to 3.69% in July, the lowest level in over 18 years
Non-performing loans in the Albanian banking system have fallen to another low. According to data from the Bank of Albania, at the end of July 2026 they accounted for 3.69% of total loans, down from 3.70% in June and 3.77% in May.
This is the lowest level recorded this year and one of the lowest levels in more than 18 years. From the historical series, a lower level was recorded in January 2008, when the ratio was around 3.58%. In February of that year, non-performing loans accounted for around 3.78% of the total.
During the first seven months of the year, the indicator has been gradually declining. Non-performing loans accounted for 3.85% of the total in January, fell to 3.80% in February, returned to 3.85% in March and then dropped to 3.75% in April. After a slight increase in May, the decline resumed in June and continued in July.
There was also an improvement in indicators that measure non-performing loans after deducting the reserves that banks have created for potential losses. Their ratio to regulatory capital fell to 6.07%, from 6.14% in June, while that to shareholder capital fell from 6.08% to 5.89%.
Meanwhile, liquidity indicators improved after declining in previous months. Liquid assets accounted for 30.11% of total assets in July, up from 29.38% in June. The ratio of liquid assets to short-term liabilities also increased to 43.28%, up from 42.41%.
Bank profitability also improved. Return on equity rose to 13.69%, from 12.13% in June, while return on assets climbed to 1.64%, from 1.48% a month earlier.
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