Profits of banks halved during the first nine months of this year due to
the increase of bad loans. Recent data from the Bank of Albania show
that the total profit of the banking system until September was 6.5
billion ALL, from 11.6 billion that it was on the same period of one
year ago.
The profits are due to the increased spending of reserve funds that banks are forced to establish as guarantee for bad loans.
Bank of Albania data show that compared to last December, bad loans have increased with 100 million USD.
The Bank of Albania has forced private banks to pay insurance for 100% of the sum of every bad loan.
As result, during the first months of the year, banks were forced to freeze more than 100 million USD as guarantee for bad loans. This figure is three times higher than the last year, the main cause why bank profits are lower.
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