Albania’s banking sector improved the quality of its loan portfolio in the first half of 2026. The non-performing loan ratio fell to 3.7%, its lowest level in 15 years, according to Bank of Albania data.
The improvement covered several segments of the portfolio. Short-term loans, loans issued in ALL and business lending recorded notable progress. At the end of June, non-performing loans totalled about 37 billion ALL.
Meanwhile, the share of loans classified as “lost” fell to 44% from 47% at the end of 2025. Loans classified as “substandard” accounted for 41% of the non-performing loan portfolio, up from 34% at the end of last year.
Banks also removed about 5 billion lek in loans from their balance sheets during the first half of the year. The amount was 6% lower than in the same period of 2025. Most of the written-off loans were issued in ALL and belonged to the business segment.
The Bank of Albania said removing lost loans from balance sheets is an accounting measure. It lowers the non-performing loan ratio but does not create an additional financial effect.
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