BNB: Problem loans with a new record high, reaching BGN 8.59 bn in July

Non-performing and restructured loans in Bulgarian banks reached a new record high of BGN 8.59 bn at the end of July, shows data of the Bulgarian National Bank (BNB). Problem loans have increased by nearly BGN 340 mln in a second consecutive month. This is the highest surge, generated in two consecutive months, since the beginning of the year. At the beginning of the year, the so-called bad loans would increase by some BGN 30-40 mln and there were optimistic expectations in the sector that their growth had started to abate. The increase in bad loans was nearly BGN 2.4 bn, compared to a year earlier.

According to the statistics of BNB, non-performing and restructured loans are now 21.23% of the total volume of loans (bank overdrafts, which are considered unproblematic, are not included). Written-off loans, non-performing loans overdue by 180 days, non-performing loans overdue by 90 to 180 days and restructured loans are included in the group of bad and restructured loans. The share of non-performing loans overdue by more than 90 days, alone stood at 13.5%, which is also a record value. BNB releases data on these loans on a quarterly basis.

Business loans account for the largest share in bad and restructured loans of 22.73%, while consumer loans come next with 19.50%, followed by housing loans with 18.20%. The figures are new record highs. BNB statistics shows that in July, total lending grew by just BGN 202.6 mln, which confirmed the uncertainty experienced by households and businesses.

The total volume of loans granted at the end of July stood at BGN 40.48 bn, as consumer lending continued to decline. According to experts, in July 2011, the banking portfolio of loans and overdrafts increased by 0.42%, on a monthly basis, and by 2.76% y-on-y to a record high of BGN 51.28 bn. At the end of July, the regularly serviced loans however, decreased by 2.48% y-on-y to BGN 31.9 bn, as bad and restructured loans were identified as the reason for the decline.

Mortgage lending, however, increased in a second consecutive month. In July it was up by 2.5%, y-on-y, to reach the amount of BGN 8.78 bn. According to the statistics of BNB, in July, banks extended nearly 5% more money to businesses, at the amount of BGN 32.32 bn.

Deposit statistics shows that the NGO sector held BGN 46.190 bn in banks, up by 12.2% over the same period of last year. Household and business deposits continue to grow by double-digit numbers, which means that the fear of the crisis has not gone away and the desire to save is still high. Household deposits increased by 12.5% per month. Companies’ savings in banks increased by 12.3% or by BGN 13.5 mln.

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