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Time deposits in Lek increased for the second consecutive year in 2025

2026-03-16 14:30:00, Ekonomi CNA

Time deposits in Lek increased for the second consecutive year last year.

Bank of Albania statistics show that, at the end of 2025, term deposits in local currency reached the value of 226.3 billion lek, an increase of 9.2% compared to the previous year. The growth of term deposits improved significantly compared to the level of 3.5% a year earlier.

Starting from 2014, term deposits in Lek had started a cycle of decline, which was especially affected by the gradual decrease in interest rates. Savings in banks began to be dominated mainly by current accounts and demand deposits. Only after 2024, term deposits in Lek returned to expansion, supported also by the increase in interest rates.

Another factor that has increased time deposits in banks may be the downward trend in yields on government debt instruments, which, especially during the 2022-2023 period, had competed with bank deposits in Lek.

However, the increase in time deposits in Lek last year can be partially explained by the overall positive performance of bank deposits.

According to statistics from the Bank of Albania, total bank deposits increased by 9.1% last year.

The improvement in deposit interest rates after 2024 appears to have increased the public's incentives to place savings in term deposits. However, at least in average terms, deposit interest rates over the past year did not increase again in 2025.

According to Bank of Albania statistics, the average interest rate on deposits in Lek at the end of 2025 was 2.39%, down from 2.45% at the end of 2024.

Meanwhile, for the Euro, the average interest rate on time deposits increased to 1.57%, from 1.47% at the end of 2024.

However, it must be said that individual banks, especially during the summer season, have been offering significantly higher interest rates than the average. In particular, a group of medium-sized banks, which are showing ambitions to grow, are being aggressive in the price they offer for deposits and seem to have succeeded in expanding their market.

The increase in time deposits is also reflected in the expansion of the banking sector's interest expenses.

According to data from the Bank of Albania, last year interest expenses reached 9.1 billion lek, an increase of 13.5% compared to the previous year.

The increase in deposit interest rates has also been driven by a growing demand for local currency funds from the banking sector. In particular, a group of medium-sized banks, which have been very active in lending, have competed with attractive interest rates for new deposits, contributing to the expansion of time deposits in the banking system.

By currency, the growth of credit to the economy continues to be concentrated to the greatest extent in the Lek. Last year, the loan portfolio in Lek increased by 16.5% compared to the previous year. It is now estimated that loans in Lek constitute approximately 60% of the loan portfolio to the economy./ Monitor