Bad leasing loans exceed 20% of all credits

For a second consecutive quarter, non-performing leasing loans exceed 20% of all extended funds, shows BNB (Bulgarian National Bank) data. In Q1 2011, bad contracts in the sector reached BGN 831 mln, or 21.8% of the total volume of funds, marking an increase of BGN 51 mln, compared to a year earlier when their share was 16.7%.

Despite the rise in problematic loans in the sector during the first three months of the year, new leasing contracts registered an almost 50% growth on an annual basis. At the end of March, the companies extended another BGN 248 mln, which was the first strong increase in new contracts since the beginning of the crisis. Demand for leasing loans, however, cannot yet compensate the expiring contracts. That is why, at the end of the quarter, the aggregate portfolio decreased by BGN 862 mln year-on-year and stood at BGN 3.87 bn. Data shows that leasing contracts worth some BGN 400 mln are being paid off quarterly, which indicates that a decline in the overall leasing portfolio could be expected in the coming quarters as well.

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