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.