Financial Stability Report - 2014 H2

The situation and performance of the Albanian banking sector and financial system was stable in the second half of 2014. The volume of activity grew and the financial performance improved further. The banking sector’s liquidity and capitalisation ratios were at an adequate level during the period. The credit portfolio quality improved at the end of the year, although the level of non-performing loans is assessed as still high. Loan loss provisions and collateralisation of non-performing loans were at good levels. The macroeconomic setting is stable, supporting the performance of the financial system. The improved economic growth and the fiscal and monetary policy actions were accompanied by a good functioning of financial markets and lower financing costs. Despite an improved financial situation, the banking sector’s risk exposure remains similar to that in the previous period.