Nonperforming loans remain a major concern for Albania

Nonperforming loans remain a major concern for Albania

Tirana, April 2, 2015/Independent Balkan News Agency

The level of nonperforming loans continues to be high in Albania, the Bank of Albania notes. But the levels of provision and loan collaterals are good.

However, the risks in the activity of the financial system and bank sector, both in interaction with the surrounding internal and external economic environment and in the structure of its activity, remain present.

BoA says that this is also proven by the stress test. According to the Bank, nonperforming loans remain a major concern. In this context, Bank of Albania says that along with the Albanian government and in collaboration with IMF, will be engaged in their incentive to revise the process of administration and handling of nonperforming loans, in all of its aspects, in order to find a long term sustainable solution. “In this collaboration, Bank of Albania will be active in the framework of its role as the oversight authority and the relation that it has with the banking industry”, reads the official statement of BoA.

The figures were discussed yesterday in the meeting of the Oversight Committee of the Bank of Albania, which discussed and approved “The Report of Financial Stability” and the “Declaration of Financial Stability” for the second half of 2014.

Bank of Albania says that during the second half of 2014, the state and the progress of the banking and financial sector, appeared stable. According to the Bank, the volume of activity has expanded and the financial situation has further improved.

BoA says that the exposure of the banking sector to other risks of the market and solvency, is limited. However, the Bank of Albania demands from banks to make a regular assessment of their risks.

In an effort for banks and branches of foreign banks to handle lending risks, BoA has announced several new rules. They aim at abrogating the use of the techniques which aim at reducing lending risks by banks.

They will be used by banks in order to reduce the lending risks, by estimating the value of exposure and of the needs for capital and also to monitor the risk of loans. /ibna/