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Construction has become one of the main sectors supporting economic growth in Albania in recent years. Some of the factors that have boosted the growth are: the increase of residential projects, the continuation of postearthquake reconstruction works and public investments, mainly in road construction. A VEC model will be presented in this paper that uses bank credit for real estate as a cointegrated variable with GDP growth, as the construction sector in Albania occupies a very important role in the economy. The objective of this model is to identify the shortterm and long-term causal relationship between this credit activity and economic growth in Albania. The analysis by subject and purpose of credit use shows that real estate investment credit for individuals occupies the largest share of the total credit portfolio, followed by real estate credit granted to businesses. From the results of the econometric model it was concluded that credit to the real estate sector has a positive effect on long-term economic growth. The construction sector is one of the sectors that contribute the most to GDP and, at the same time, to the growth of the banks' loan portfolio. Lending to this sector, according to the results of this model, has a positive influence on the economy. [ABSTRACT FROM AUTHOR]

This paper aims to explain some current considerations and approaches about the credit activity in Albania compared to the other countries in the Western Balkan's region in terms of bank-specific indicators. During 2020 and in the first half of 2021, the evolution of bank credit in the Western Balkan countries continued to be positive, influenced by monetary easing, support for credit risk reduction and other support policies offered by central banks. The balance sheet of banks in the region has improved over the period, and the non-performing loan rate has declined compared to a year ago in most countries. Among the various lending measures, the study of credit activity will be focused on bank credit (loans and advances) to the private sector, one of the most important indicators of bank development. Using a qualitative and quantitative analysis, the main objective of this paper is to generate and explain through a descriptive and graphical analysis, the evolution of the bank credit to the private sector for the six countries of the Western Balkans, Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia. Countries in the region have benefited from a substantial inflow of foreign funds and cross-border loans before the crisis. When the financial crisis broke out, credit growth declined dramatically and did not begin to recover, in part due to the banking sector's reversal in external financing. The COVID-19 pandemic also brought a sudden negative revision of expectations. [ABSTRACT FROM AUTHOR]

Credit markets play a key role in the economic cycle of the advanced economies. The main objective of this paper is to assess, through an empirical analysis, if there is a link between the evolution of credit activity and economic growth in the current economic context. The econometric model used to determine the relationship between variables is that of multiple linear regression using a total of 120 panel observations for the years 2000-2019. A sample of data consisting of six developed countries such as Australia, France, Germany, Italy, Japan and the United Kingdom was used to make the following model. The dependent variable, which determines economic growth, is calculated as the annual percentage growth rate to GDP. The results of the econometric model showed that there is a statistically significant direct relationship between economic growth and the factors: bank credit to the private sector, the real interest rate and ROE. On the other hand, the results of the econometric model showed that there is a statistically significant indirect correlation between the dependent variable and the determinants of bank credit to government and public enterprises and non-performing loans. [ABSTRACT FROM AUTHOR]

The dominant component of the Albanian financial system is the banking sector, whose activity is transparent and leads to an efficient market economy. Credits make up the majority of the banking system's assets, which is why it is so important to determine if there is a link between the evolution of credit activity and economic growth in the current economic context. This paper aims to estimate through an empirical analysis the long-term and short-term effects of the impact of the credit activity and some bank- specific factors on economic growth in Albania, by employing a Vector Error Correction Model (VECM), using quarterly data from 1998q4 to 2021q4. For estimation purposes, economic growth is measured as the quarterly rate of GDP growth. In the econometric model the focus will be on the independent variable bank credit to the private sector as percent of GDP. This indicator is a very important one and widely used in the literature as a determinant of credit activity. The other independent variables considered are: treasury bills as percent of GDP; deposits as percent of GDP; ROE and the Herfindahl index. In general, there was a negative cointegration between GDP and bank credit to the private sector. In the long run, the results of the econometric model showed that there is a statistically significant direct relationship between the dependent variable of economic growth and the factors of treasury bills, deposits and the Herfindahl index. On the other hand, the results of the econometric model showed that there is an indirect correlation between economic growth and ROE. [ABSTRACT FROM AUTHOR]

The Vector Error Correction Model uses bank credit to the public sector and bank credit to the private sector as variables co-integrated with GDP growth. Finding the short-term and long-term causes of the relationship between credit activity and economic growth in Albania is the primary goal of this paper. The independent variable of bank credit to the public sector expressed as a percentage of GDP will be the focus of the econometric model. The additional independent factors taken into account are: bank credit to the private sector as percent of GDP; deposits as percent of GDP; roe; non-performing loans and the Herfindahl index. The VEC model concluded in a positive relationship between economic growth and public credit, deposits and non-performing loans. Otherwise, the results displayed a negative link between economic growth and private credit, ROE and the Herfindahl index. [ABSTRACT FROM AUTHOR]

The bank's performance is its ability to generate sustainable profitability. Although banking institutions have become increasingly complex, the key factors in their performance remain earnings, risk-taking efficiency and financial leverage. The countries of the Western Balkans have some common features: the history of socioeconomic development, the transformations that have taken place, the reforms undertaken, liberalization, restructuring and the path to development. Their financial sector is primarily bank-based, so the soundness of the banking sector is significantly important for the stability and progress of their economies in the long term. Using a qualitative and quantitative analysis, the main objective of this paper is to generate and explain the main features about the role and financial performance of banks in the Western Balkans. The research methodology is based in explaining through a descriptive and graphical analysis, the particularities of the main banking systems in Albania, Bosnia and Herzegovina, North Macedonia and Serbia, presenting the four main performance measurement indicators: return on assets (ROA), return on equity (ROE), cost-to-income ratio and net interest margin. Analyzing the data for the period 2000-2019, it was assessed that the region is quite consistent in terms of the performance of the banking sector, the latter being almost equally dynamic for all four countries. The regional economic environment does not favor the stability of the financial system, but prevents the increase of the efficiency and productivity of the banking sector. [ABSTRACT FROM AUTHOR]

The profitability of a banking sector is a mirrored image of how banks use their resources to achieve their objectives. The determinants of bank profitability have attracted the interest of academic research, as well as that of the financial markets and bank supervisors. The main objective of this paper is to identify the bank specific and macroeconomic factors that affect the profitability of all commercial banks operating in Romania, through adequate empirical analysis. The econometric model used is that of multiple linear regression where as the dependent variable used as proxy for bank performance is obtained the Return on Equity ratio and as independent variables are chosen a number of macroeconomic indicators and indicators of assets and liabilities of the Romanian banking system. The results of the econometric model showed that there is a direct statistically significant relationship between ROE as determinant of bank profitability and factors such as bank credit to the private sector as percent of GDP, real interest rate and the inflation rate. On the other hand, the results of the econometric model showed that there is an indirect statistically significant correlation between the level of ROE and the indicators of bank assets as percent of GDP and the unemployment rate. The Romanian banking system has prudent indicators of solvency, profitability and balance sheet structure better than the European average, but the quality of assets is still discordant, due to the rate of non-performing loans and loans with restructuring measures, which, although decreased sharply, remain above EU average levels. [ABSTRACT FROM AUTHOR]

The main function of banks is to facilitate the better functioning of lending activity, helping to improve efficiency and rational distribution of resources between different entities. If credit is used to purchase productive resources, this will help economic growth. The overall development of credits is usually based on a combination of factors that simultaneously impact the demand and supply of bank credit. Using a qualitative and quantitative analysis, the main objective of this paper is to establish the analysis of the evolution and determinants of credit activities, especially of the factors that have an impact on credit growth. Also, this paper will analyze the effects that the current pandemic has brought to the European banking sector in general and in particular to the credit activity. The results showed that economic growth, credit quality, financial intermediation rate, along with foreign and domestic funding sources are the main determinants of credit growth. [ABSTRACT FROM AUTHOR]

The dominant component of the Albanian financial system is the banking sector, whose activity is transparent and leads to an efficient market economy. The mission of a performing banking system is to allocate the capital exclusively in profitable projects, to facilitate the best functioning of the lending activity, helping to improve the rational distribution of resources between different entities. The purpose of this paper is to provide a comprehensive statement of the most recent credit developments in Albania, in order to determine if banks, with their role as financial intermediaries, can help stimulate economic growth. Loans compose the majority of the Albanian banking system assets. In the last years, loan portfolio quality has been significantly deteriorated, which can be easily understood from the increase in nonperforming loans. The methodology used in this article is a quantitative and qualitative analysis of credit data provided by the Albanian banking system, the identification of factors that can boost credit growth in conditions of its significant slowdown and the study on lending performance and progress, in comparison with different countries in the region. [ABSTRACT FROM AUTHOR]