The non-performing loan ratio fell to 3.75% in April

2026-06-10 15:07:00, Ekonomi CNA

The non-performing loan ratio returned to decline in April. According to statistics from the Bank of Albania, the non-performing loan ratio fell to 3.75%, from 3.85% in March. This indicator continues to decline on an annual basis, compared to the level of 4.03% in April 2025.

The non-performing loan ratio is currently at its lowest level in the last 18 years.

In absolute terms, the stock of non-performing loans is estimated at approximately 36.3 billion lek. However, bad loans in value have increased by 3.4% compared to the previous year.

For the time being, the non-performing loan ratio appears to be continuing its downward trend, despite concerns related to the rapid growth of lending in recent years. The good macroeconomic performance and the continuous expansion of the loan portfolio are positively affecting the performance of the overdue loans indicator.

At the end of April, the outstanding credit to the economy reached 968.2 billion lek, an increase of 9.5 billion lek compared to March. On an annual basis, the credit portfolio to the economy is up 11% compared to a year earlier.

The measures taken last year by the Bank of Albania seem to have started to have an effect in slowing down lending for housing purchases by individuals. However, this slowdown has been offset by growth in the consumer credit segment and acceleration in the growth of the business loan portfolio.

The sector is maintaining a positive performance in terms of growth, but also financial performance and asset quality.

The crisis in the Middle East and the increase in fuel prices have put some new risks in perspective, but nevertheless the extent of the impact of this crisis seems to be more limited than could have been thought in the first period of its outbreak.

Inflation is rising and making an increase in interest rates more likely in the coming months, but Central Banks in their baseline scenarios do not foresee dramatic effects and long-term deviations from their inflation targets.

Higher interest rates would negatively affect the solvency of liabilities, but also the demand for new loans. Theoretically, this could increase the risks of an increase in problem loans, but, as long as the increase in rates is limited, this impact is not expected to be very large./Monitor