Bad loans reduced, 340 million USD less in a year

20/10/2017 03:30

Bad loans in Albanian banks were reduced with 340 million USD in a year.
Official data from the Banks Association show that problematic loans
have dropped once again this August, reaching 15.1% of the total, from
21.4% that they were last August.

This means that bad loans in Albanian banks are at 820 million USD, from 1.16 billion that they were in the same period of 2016.

Data show that from last October, bad loans have constantly dropped. According to the Bank of Albania, this is due to mostly two factors: deleting some of the bad loans and restructuring others.

By deleting them, Banks remove from their balance loans that have not been returned for more than three years, a request dictated by the Bank of Albania.

Besides old loans, some banks are deleting problematic loans as well, which are newer than three years. If borrowers pay part of the debt, the bank drafts a new agreement.

Sources from the Bank of Albania say that this method has efficient results for reducing the portfolio of problematic loans, while restructuring continues with others. Restructuring is a process for prolonging the time in which the loan is paid, and the interest rate is lowered.

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