TIRANA, January 27 – Commercial banks slightly increased their reserve fund for problem loans, also known as provisions, in line with regulatory requirements of the Bank of Albania.

The Bank of Albania reported that provisions stood at 30 billion lek at the end of the third quarter of 2025. This represents a 3.3% decrease compared with the same period last year.

Provision expenses depend directly on the quality of the banking sector’s asset portfolio.

Data from the Bank of Albania showed that the ratio of problem loans remained stable in 2025. By the end of November, problem loans fell to 4.19%, down from 4.48% in November 2024.

Banks must calculate provisions at 1% for standard loans and 5% for loans overdue 30–60 days.

Provision rates increase when a loan becomes classified as problematic. Banks must allocate at least 20% for substandard loans (overdue more than 60 days), 50% for doubtful loans (overdue more than 90 days), and 100% for lost loans (overdue more than 180 days).

/a.p./