Banks, record changes in loan conditions - Restructuring flow, the highest since 2021. Fewer bad loans written off the balance sheet
Commercial banks restructured a record number of loans during the second half of last year. According to the Financial Stability Report published by the Bank of Albania, the flow of restructured loans for this period is the highest since 2021.
About 4 billion lek, or 2% of the new credit flow of the period and 12% of the stock of problem loans, were restructured, that is, the terms of the loan were changed, in order to make repayment easier for the individual or business.
Commercial banks may restructure a loan to ease the heavy burden that a borrower may have. So the bank offers borrowers some facilities, due to the financial difficulties they may encounter during the repayment process. These facilities include changes in the terms and conditions of the loan, such as changing the product and capitalization of interest, the maturity period and the interest rate, the execution of collateral or other assets for partial payment of the loan, the replacement of the original borrower or the inclusion of an additional borrower.
Lek and foreign currency loans to businesses were the most restructured. The data shows that the main form of restructuring requested by clients and approved by banks was the extension of the maturity.
What about writing off lost credits?
Removals from the balance sheet of bad loans have continued, but less than before.
The value of bad loans written off from balance sheets was around 2 billion lek in the second half of the year. During 2025, around 7 billion lek of bad loans were written off, and around 85% of this volume is related to loans taken from businesses. The value of loans written off in the recent period was 4.2% of the total outstanding amount of non-performing loans in the banks' portfolio, down from around 15% in the first half of 2025.
When an individual or business fails to pay its loan installments for an extended period of time, the bank decides to write them off its balance sheet or sell them to third parties, in order to reduce the ratio of non-performing loans. Despite this, the individual or business will still remain a debtor, may be required to pay the loan by the other party, or will be unable to obtain a new loan.
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