Written-off Loans Reach at Lek 6.3 billion, Bank of Albania Says
Albanian Daily News
Published November 30, 2016

The Bank of Albania announced
Tuesday that for the first eight months of the year, the value of written-off
loans amounted to Lek 6.3 billion from the balance of non-performing loans.



Reduction of the value of write-off
loans is related to a partial depletion of this process, precisely because the
majority of lost loans were deleted last year. The low writing-off of the lost
loans has been insufficient to reduce more the level of bad loans this year given
that at the end of September this indicator amounted to 21.3 percent.



However, the Bank of Albania estimates
that the amount of loans that the banks need to write-off from their balance
sheets is still significant and it expects that in the last months of the year there
will be an accelerated clearance of loan loss from the balance sheets.



Generally, this process is more
concentrated in the last months of the year, before the banks close their
annual balance.

According to the regulatory changes approved by the Bank of Albania last year,
banks have to write-off from their balances the loans that were rated for more
than three years as lost ones.



According to data from the Albanian
Association of Banks, by the end of August, the value of the lost loans was
about Lek 61 billion, though there is no accurate estimation of how many of
them meet the deadlines to be written-off. According to the Bank of Albania, in
2015 banks operating in Albania wrote-off about 27 billion lost loans.





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