Non-bank financial institutions' non-performing loans increased in 2023

2024-07-10 07:43:00, Ekonomi CNA

Non-bank financial institutions' non-performing loans increased in 2023

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The ratio of non-performing loans for non-bank financial institutions increased last year.

According to data from the Bank of Albania, at the end of 2023 this ratio increased to 13.9%, from 13.2% the year before.

This ratio is almost three times higher compared to the average level of non-performing loans in the banking sector, which at the end of 2023 was slightly more than 4.7%.

The Bank of Albania estimates that the increase in total problem loans for non-bank financial entities (about 85% of it) was mainly influenced by the actions of the entities Final and Micro Credit Albania, which during 2023 handled a significant volume of problem loans , bought by banks and other institutions.

For the past year, the company Micro Credit Albania marked a significant increase in the microcredit portfolio, with 0.53 billion ALL. In 2022, this amount was in the item "Other receivables", as problem loans purchased, but not handled by the entity.

After the measure of suspension of activity that the Bank of Albania applied to this entity during 2023, it has handled a high number of loans, classifying them in the relevant classes of the microcredit portfolio. Similarly, the Final subject, during 2023, has transferred

a part of the problem loans that he had bought from other entities (0.43 billion ALL), from the item "Other receivables" in the relevant classes of the microcredit portfolio.

The reclassification of the loans of these entities has consequently influenced the increase in the ratio of bad loans in the sector.

On May 23 of this year, the Governor of the Bank of Albania, Gent Sejko, decided to revoke the license for the above two financial institutions, after their shareholders were sent for trial by the Prosecutor's Office of Tirana, for legal violations in the loan collection process. bad.

Despite the increase in the ratio of problem loans, during the year 2023, non-bank financial institutions that exercise lending activities have generated a positive net result of approximately five billion lek. Compared to the previous year, the value of the net profit has increased by more than 84%.

However, most of the profit increase compared to 2022 belongs to the dividend received by the financial institution Tranzit, from the participation as a shareholder in the American Investment Bank. Exactly Tranzit was the entity with the highest contribution to the realized profit, while Kredo Finance and IuteCredit Albania were ranked after it.

The average return on assets for IFJBs exercising lending activities reached 7.7% (against 4.8% in 2022), while the average return on capital reached 37.4% (against 17.9% in 2022).

At the end of 2023, the gross loan portfolio for non-bank financial institutions reached ALL 53.6 billion, an increase of 13% compared to the previous year. The gross credit portfolio of IFJBs reaches 7.25% of the total credit of the banking system, recording an increase of 1 percentage point compared to the previous year./Monitor