BNB: Bad loans at a record-high of 14.5%

Non-performing loans in the banking system hit a new record, Bulgarian National Bank (BNB) data showed. According to central bank statistics, at the end of Q3 2011, loans overdue by more than 90 days reached 14.45%. Three months earlier, their share was 13.53%, or 0.92% less, while at the end of Q1 2011, these accounted for 12.93% of all loans. Despite the increase in bad loans, BNB sources believe that their growth rate is slowing down. Let us remind our readers that the most recent statistics on credits reported that bad and restructured loans increased by BGN 74 mln in September and their share stood at a record-high of 21.56% of all credits (excluding overdrafts). However, this monthly data included monthly and renegotiated loans and not just problem loans.

At the end of September 2011, banks’ profits increased by 1.7% year-on-year to BGN 484.5 mln, BNB data released yesterday also showed. This is the second month of this year when banks’ profits exceeded the results from 2010. At the same time, experts reported a significant growth of 227% to BGN 45.8 mln in the financial performance for September 2011, compared to the same month of 2010. In Q3 2011, banks’ profits increased by 36.4% on an annual basis to BGN 169.5 mln. The main reason for the strong growth is the slowdown in the annual growth rate of credits’ depreciation. In September, this indicator dropped by nearly 30% to BGN 109 mln. For the nine months of the year, the depreciation stood at BGN 953 mln, the year-on-year increase being 0.61%.

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