Ludmila Kuiumdjieva
ludmila.kuiumdjieva@klassa.bg


In February, non-performing and restructured corporate loans reported a decline for the first time in nearly 2 years, according to BNB (Bulgarian National Bank) data. At the end of the second month of the year, the volume of bad loans dropped by nearly BGN 21 mln up to BGN 4.622 bn, compared to January 2011. Their share in the total portfolio of banks was 20.53 %, which means that every fifth loan borrowed by the business sector was not served within the set deadline. There was a percentage decrease in bad corporate loans in March 2009. The positive growth of exports in recent months started to affect favourably companies and corporate loans borrowed in February reached BGN 31.62 bn, or 3% more than one year. This could be considered as a positive trend since bankers in Bulgaria expect the recovery of crediting to begin precisely in the corporate sector and afterwards to be transferred to households.

According to BNB data, the savings rate of firms, however, remains the same. In February, they already have a total of BGN 12.3 bn in deposit accounts, thus marking over 3% growth year-on-year. Although there is a positive increment, it is lower than the 6.7% rate of January. The increased volume of granted loans, the decline in non-performing loans and the dwindling deposits could be regarded as signs of optimism on the part of businesses seeking new investments.

As a whole, February has a positive impact on the banking sector since the volume of bad and restructured loans registered the lowest growth for the past 27 months, or after November 2008. It rose by only BGN 31.4 mln in February 2011, up to a total of BGN 2.83 bn, showing a growth of only 0.42% on a monthly basis, according to the figures of the National Bank.

Despite the good lending news for companies, in terms of households, the upward tend for increase in non-performing liabilities continues. Their share in the total portfolio of banks is already over 17.1 % versus 16.8 % in January. Thus, at the end of February, the growth of bad household loans climbed by BGN 52.3 mln up to BGN 2.93 bn.