October was positive for the Albanian banks, although the bad loans kept growing.
“Shqip” newspaper publishes that the assets of the banking system reached 7.95 billion EUR, 0.9% more than in September and 14% more than October 2010.
The loaning portfolio increased with 15%, in annual terms, reaching 3.9 billion EUR, but the growth is completely dedicated to the crediting of the non-financial corporates, since the loan for families and individuals saw a slight increase of 5.4%.
On the other hand, bad loans grew with 18.6% of the total, from 18.4% that they were in September, and 14.1% that they were in last October. The profits accumulated in the January and October period of this year reached 2.8 billion ALL (20 million EUR). In the same time of 2010, the Banks had profited 4.4 billion ALL (32 million EUR).
The banks have been facing a growth of bad loans in the three years of crisis, mainly due to the unpaid loans that were given in the 2004-2007 period, when banks entered a furious race with each other for capturing the yet undeveloped loan market in the country. Bad loans removed the banks’ high profit norms, which reached an annual level of 25% over the invested capital.
This year, the profit norm on the shareholding capital reduced with 2.9%. The profit reduction has reduced the banks’ readiness to hire more people and to extend the loan market. In the last 12 months, the banks have closed many branches and unprofitable agencies, or have displaced their activities in several areas.
The number of banking branches and agencies was reduced from 554 in October 2010 to 548 in October 2011. Part of the agencies and their branches were replaced with ATM machines.
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