Market of bad loans created
17/05/2014 00:00
Redundant guards and employed prisoners left without salaries even though the fund was allocated 5 months ago 27/11 21:15
The Albanian banks sold 100 million USD of bad loans for 2013. The
figure was made public by the Bank of Albania in the final report over
the financial stability of our country.
The sale of problematic loans is a new phenomenon for the Albanian economy. According to the Bank of Albania, these operations were the main cause that stopped the growth of problematic loans, which marked the lowest norm last year. But how does their sale work? Top Channel has learned that 2 loan portfolios were sold in the past years, with problems from two private banks. The first one was bought from an Albanian fund and has thousands of loans taken from individuals who have not been correct with the payment. The second portfolio is 60 million USD, made of problematic loans of 15 Albanian companies.
Banks sell problematic loans with lower prices than their value. In some cases, when they are not covered by collateral, they sell it for 10% of the value, since the chances of payment are low. Through the sale they not only clear the balance, but they also pass the obligation to follow these loans to the buyer, by saving the administrative costs too.
But not every company can buy bad loans. This business requires a license from Bank of Albania, and our country has currently seven similar financial institutions that can operate in this activity.
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