According to BNB data for the first six months of 2011, eight banks report nearly BGN 53 mln losses

Eight banks operating in Bulgaria reported BGN 52.67 mln losses at the end of the first six months of 2011, according to data of the Bulgarian National Bank (BNB). The number of financial institutions experiencing fiscal difficulties increased by 3 year-on-year, while financial losses rose by BGN 10.44 mln, showed the statistics. In late June, Alpha Bank, which registered a loss of BGN 25, 545 mln had the most severe financial hardship. Though it recorded the highest negative result in the banking sector, at the end of the period, its loss decreased by BGN 11.9 mln year-on-year. Bulgarian-American Credit Bank ranked second in terms of the registered financial loss of BGN 14.06 mln, followed by Investbank, which was indebted with BGN 6.77 mln. Among the banks with the greatest loss was Emporiki Bank. At the end of June, the credit institution recorded BGN 3,115 mln as a negative financial result or BGN 1.3 mln more year-on-year. The banks suffering losses also included NLB Bank Sofia JSC (BGN 2.36 mln), Teximbank (Texim Private Entrepreneurial Bank PLC) (BGN 436,000), Regional Investment Bank (BGN 227,000) and T. Ç. Ziraat Bank, Sofia Branch (BGN 149,000).

The banking system reported a total profit of BGN 315 mln (BGN 35 mln in June alone). This is a good result, although nearly 30% lower than the profit registered for the same period of last year, reported BNB. The confidence indicator in the banking system is the increase in funds borrowed. The major resource for banks remained the deposits of citizens, whose share rose 45.6% of the funds  borrowed. In the last three months, these increased by 1.5%, while at the end of June, they reached the impressive amount of BGN 64,304 bn, according to BNB statistics. Deposits recorded a growth of 2.1% only.

It is an interesting detail that for the second three months of the year, a more tangible growth was observed in terms of Euro deposits. For the first two quarters, domestic financial institutions managed to accrue revenue from their main activity. The latter, according to experts, was enough to neutralise the major risks associated with problematic loans.

The volume of bad loans also increased in the second quarter of the year, but their rate of growth has been slowing down. The share of exposures in arrears of over 90 days was 13.53%, compared to 12.93%, as of March 31.

Meanwhile, Levon Hampartzoumian, Chairman of the Association of Banks in Bulgarian commented on BNT (Bulgarian National Television) that banks operate some of the few businesses which are actually the financial infrastructure of any economy. Therefore, they are subject to a very high degree of regulation. He explained that our banking system is much more stable due to the useful experience gained during the crisis. The banker added that interest rates will not drop until sustainable economic development is achieved. The main target for overcoming the crisis will be entrepreneurial activity and sustainable development, which is expected in Bulgaria after the crisis, added he. Hampartzoumian also explained the large amount of BGN 29 bn held in household deposits. "As long as people do not feel economic enthusiasm for doing their jobs and for making their business, they will abstain from spending. This is rational behaviour. Companies are also cautious with respect to making new investments. That is precisely why the crisis occurred but we do not really feel it," clarified the Head of ABB.

On her part, Violina Marinova, CEO of DSK Bank, commented that bank liquidity in Bulgaria is over 25%, which is a good indicator of a stable banking system. People are still cautious and refrain from consumption. If we analyse the growth of bad loans, growth in the second quarter of 2011, compared to the first quarter was 0.6%. This percentage is significantly lower than every quarter of 2010, clarified Marinova.

The faster Bulgaria joins the Euroarea, the better for it, said Hampartzoumian. He distanced himself from the opinion of the Finance Minister, Simeon Djankov, that, for now, we should not join the Eurozone in a hurry. According to the banker, the political and business sector should not interfere. His words supported Marinova's statement fully.

Прочети цялата новина

Свързани новини: