Banks’ profits decline by BGN 11 mln

The widespread statement that "banks never incur losses” has proven wrong again. The profit of the sector for the first four months of the year declined by BGN 11 mln, compared to the result achieved in the same period of 2011.

Financial institutions in the country recorded a profit of BGN 203 mln by the end of April, or an increase of just BGN 27 mln, compared to March, according to data of the Bulgarian National Bank, published yesterday.

So, the positive trend from the beginning of the year towards a steady growth in profits is off.

In the first two months of the year, financial institutions recorded a profit of BGN 117 mln and, thus, for the first time in three years, their result exceeded BGN 100 mln. By the end of March, banks’ profits stood at BGN 176 mln.

On the one hand, the weaker results can be explained by the continuing growth in deposits.

BNB statistics reported a successive increase in savings of BGN 667 mln. Only 18.5% of the deposited funds did not come from Bulgarian citizens and institutions, but from abroad. The resources from institutions other than crediting ones increased by 2.6% (BGN 555 mln), and the deposits of individuals and households were up by BGN 292 mln per month. So, in a year and a half, the population's savings rose at a double-digit pace.

In March, reported growth stood at BGN 303 mln and in February- at BGN 200 mln. From the beginning of the year until the end of April, the total amount of new deposits in banks increased by nearly BGN 1.2 bn. In the mentioned period, depositors in commercial banks received BGN 438.9 mln in interest rates and in April alone, the respective amount was BGN 101 mln. In the last 12 months, the deposits of the population in banks increased by BGN 4.241 bn and the incomes from interest rates stood at BGN 1.28 bn.

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