Non-performing loans decline to lowest level since 2014
Non-performing loans in Albania dropped to 4.12% in January 2025, marking the lowest level recorded since 2014. According to the Bank of Albania, this figure reflects improved repayment discipline among businesses and individuals. The decline follows a further reduction from the 4.17% figure in December 2024, demonstrating financial stability in the country.
Why is this important: The steady decline in non-performing loans signals stronger financial health in both businesses and households. It also reflects the positive impact of monetary policies, such as the 2.75% base interest rate cut implemented by the Bank of Albania. These developments contribute to greater confidence in the country’s banking system and economic stability.
Context: In annual terms, the rate of non-performing loans dropped by 0.76 percentage points, according to official figures. The decline coincides with the rise in digital banking transactions, which have significantly increased over the past year.
Remote banking transactions (home banking) surged in 2024, with 9.36 million transactions recorded. The total monetary value of these transactions reached 2.39 trillion ALL, reflecting a 19% increase compared to 2023. Additionally, the number of internet-connected bank accounts reached 1.35 million, marking a 23% annual growth.
Banking Performance Overview
Non-Performing Loans rate:
- December 2024: 4.17%
- January 2025: 4.12%
Remote Banking Transactions (2024) figures:
- Total Transactions: 9.36 million
- Total Value: 2.39 trillion ALL (+19%)
- Online-Linked Bank Accounts: 1.35 million (+23%)
With lower default rates and growing digital banking adoption, Albania’s financial system continues to demonstrate resilience and modernization.
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