Page 74 - bne IntelliNews Southeastern Europe Outlook 2025

also grew, totaling ALL1.7 trillion at the end of September, compared with ALL1.6 trillion in the same period of the previous year. The total assets of Albania’s banking system expanded by 7.2% during the year, reaching ALL2.06 trillion as of September.
Among the 11 banks operating in the country, Banka Kombëtare Tregtare (BKT) remained the largest in terms of assets at the end of the third quarter.
Albania, along with neighbouring Montenegro, joined the Single Euro Payments Area (SEPA) in November, following approval by the European Payments Council. This makes them the first enlargement countries to be admitted to SEPA. With this inclusion, payment service providers in both countries can now adhere to SEPA schemes, facilitating cross-border euro transactions.
Previously, Albania was removed from the Financial Action Task Force’s (FATF) grey list in October 2023, raising confidence in the country’s financial system.
The European Commission’s 2024 enlargement report noted that Albania's financial sector remains stable, with increased bank profitability and expanding credit growth. However, financial intermediation remains low, reflecting structural challenges.
The report highlighted a capital adequacy ratio of 19.4% for Albanian banks in December 2023, well above the regulatory minimum of 12%. Profitability has improved significantly, driven by higher net interest income. The non-performing loan (NPL) ratio fell to 4.7% at the end of 2023, the lowest since the global financial crisis.
Despite these gains, risks persist. The high proportion of variable-rate loans, about 75% of total lending, presents potential vulnerabilities, while banks’ significant exposure to government securities increases sovereign risk. The report said that financial intermediation remains weak, with private sector loans accounting for just 32% of GDP as of January 2024. Although credit growth in the domestic currency has accelerated, particularly in real estate and mortgage lending, foreign currency loans experienced a contraction due to exchange rate shifts.
5.1.3 Industry
In 2023, Albania's key industrial outputs included 891,400 tonnes of crude petroleum and an estimated 474,444 tonnes of pig iron and steel, according to INSTAT. The country also produced 822,206 tonnes of chromium ores and concentrates, while cement production reached 2,176,865 tonnes.
The Bulqizë mine stands out as Albania's largest chromium reserve and ranks among the most significant in Europe. AlbChrome Ltd. is the country's leading producer of chrome ore and ferrochrome and is one of the most prominent mineral companies in Southeastern Europe.
74 SE Outlook 2025 www.intellinews.com