The non-performing loan ratio (NPL) started 2026 with a slight increase. According to data from the Bank of Albania, in January, the non-performing loan ratio was at 3.85%, from 3.8% at the end of 2024. This indicator, however, remains on a downward trend on an annual basis, from the level of 4.12% a year earlier.

The stock of NPLs at the end of January is estimated at approximately Lek 36.2 billion, up 4.3% compared to a year earlier.

The non-performing loan ratio had shown a fluctuating performance during 2025, but at the end of the year, it suffered a more noticeable downward shift, partly related to the usual process of writing off lost loans before closing the annual balance sheet.

On the other hand, the reduction in the ratio of non-performing loans was also supported by the rapid growth of the loan portfolio. The loan portfolio for the economy at the end of 2025 reached the value of Lek 943.5 billion. On an annual basis, the total loan portfolio increased by 12.9%. The growth of the portfolio accelerated further, compared to the growth of 12.3% in 2024.

However, the rapid growth of credit in the last two years has increased concerns about the expected quality of the loan portfolio for the economy going forward. These concerns may become more acute in the event of scenarios that could worsen the performance of the real economy and the solvency of borrowers. Concerns about scenarios of this type have increased after the attacks on Iran and tensions in the Middle East, which have led to an increase in oil prices and consequently, the risks of an increase in inflation.

In a statement to “Monitor” at the end of 2025, the Bank of Albania assessed that care should be taken to control and moderate the potential effect of rapid credit expansion and increased market competition on the relaxation of lending standards.

The Bank of Albania has in fact, reacted through regulatory tightening. However, in the second half of last year, the measures have not brought any significant slowdown in the pace of lending for the purpose of financing the purchase of housing.