11 billion lekë of bad loans have been erased from Albanian commercial banks’ books during the first half of 2015. The move, the first done in the country since the establishment of commercial banks, was done after an obligatory rule issued by the Central Bank.
Changing the rules of the game, the Central Bank made it possible for commercial banks to erase from their books every bad loan three or more years old, something not possible in the past. But banking experts have made it clear that this does not mean that the debts are cleared and banks staff will continue to pursue their settlement.
The move helped improve the reduction of bad loans figures. Official data from the Central Bank showed problematic loans fell to 20,3% in June, compared to 22,7% they were in the first quarter, the biggest fall within a quarter ever registered since the crisis began.
80% of this fall was due to the move, other causes include measures like debt restructuring. Now the main target is to reduce bad loans’ level up to 20% within this year, with the aim to help the economy recover faster.
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