The Albanian banking sector continues to show robust growth, as evidenced by the second quarter of this year. Key indicators such as total assets and loan portfolios have seen significant increases, reflecting a healthy and expanding financial environment. According to data from the Albanian Association of Banks (AAB), all banks in the country reported profits for the first half of the year, indicating strong financial health across the board.

Why does it matter

For prospective investors, the rising asset values and loan portfolios of banks in Albania, accompanied by a significant profit increase, signal a stable and profitable environment for investment in the country. This is a positive indicator of the country’s economic health and its progress towards financial stability.

In the first half of the year, the banking sector in Albania reported a net profit of 19.3 billion ALL, which is a 31% increase compared to the same period last year.

The total assets of the banking sector reached 2 trillion ALL by the end of June, marking an increase of approximately 33 billion ALL since the beginning of the year. This annual growth rate of 7.3% is an improvement from the 6.1% growth observed at the end of the first quarter.

Furthermore, the loan portfolio has also seen notable growth. By the end of June, the loan portfolio was valued at 739 billion ALL, representing a 7.5% increase since the start of 2024 and an 11.7% rise compared to the same period last year.

Another important aspect is the portfolio of securities, with 56% being denominated in foreign currency, primarily in euros, as reported by the Bank of Albania. The total value of these financial instruments reached 14.2 billion ALL in mid-2024, an 83% increase compared to the same period last year. Bank bonds offer higher returns compared to bank deposits or government securities. The majority of these bonds are purchased by individual bank clients, although commercial companies are also investing in these instruments to manage excess liquidity and diversify their portfolios. Currently, seven out of eleven commercial banks in the country have issued bonds through private offerings, reflecting a growing trend towards diversification and more sophisticated investment strategies within the sector.