The share of bad loans in Albania’s banking sector edged down in November, continuing a gradual improvement in asset quality across the system, according to the latest central bank data. 

The ratio of non-performing loans (NPLs) to total lending fell to 4.19% in November from 4.33% in October, according to the Bank of Albania. The figure was also lower than a year earlier, when the NPL ratio stood at 4.48% in November 2024.

The data reflects a steady decline in problematic loans as lenders maintain tighter credit standards and step up recovery and restructuring efforts.

Albania’s banking system has spent the past decade reducing a once-elevated stock of bad loans that followed the global financial crisis and a domestic credit boom. The NPL ratio peaked at more than 20% in the mid-2010s.