Banks' personnel expenses/ Increasing for the fifth consecutive year

2025-12-27 08:23:00, Ekonomi CNA

Banking sector personnel expenses are increasing for the fifth consecutive year.

According to data from the Bank of Albania, personnel expenses during the first 9 months of 2025 amounted to more than 14.4 billion lek, an increase of 12% compared to the same period in 2024 and the highest level ever recorded for this period of the year.

Data from the Albanian Banking Association showed that at the end of September, banks reported 7,445 employees, an increase of 5% compared to the same period a year earlier.

The increase in the number of employees seems to have influenced the increase in personnel expenses, but nevertheless the greatest effect continues to be provided by the increase in salaries.

According to INSTAT data, for the second quarter of 2025, the average gross salary in the financial sector reached a record level of approximately 175 thousand lek per month, an annual increase of 5.3%.

The process of consolidation of the banking sector, until 2019, also temporarily brought a decrease in personnel expenses. However, in the years after the pandemic, this expense item has returned to growth at an accelerated pace and has reached the highest historical levels.

The banking and financial sector has faced increasing pressure from the labor market, especially in low- and mid-level positions, forcing these institutions to revise salaries upwards.

The increase in wages, however, has also been supported by the positive performance of the sector and the increase in profits in recent years. Banks are continuing to exploit the effect of rising interest rates, but this effect is gradually fading and the growth of net interest income has been curbed this year.

These factors have also led to a decrease in profits. The banking sector's net profit for the first 9 months of 2025 reached 26.2 billion lek, down 6% compared to the same period a year ago.

In recent years, the Albanian economy has faced significant increases in labor costs, caused mainly by negative demographic trends, youth emigration, and competition from foreign markets in attracting specialized labor.

In the monetary policy report for the fourth quarter of the year, the Bank of Albania assesses that domestic inflationary pressures have strengthened, reflecting the expansion of economic activity, tight conditions in the labor market, and the increase in rental prices. /Monitor