The profit of the banks in Bulgaria increased by almost 50% at the end of July

The profit of the banks in Bulgaria increased by almost 50% at the end of July
The profit of the banks in Bulgaria increased by almost 50% at the end of July

Lenders have reduced set-aside provisions, net interest income and income from fees and commissions are also growing

Photo: Dimitar Kyosemarliev, Investor Media Group

Against the background of a number of challenges related to the war in Ukraine, accelerating inflation and fears of a recession in a number of economies, the business of Bulgarian banks continues to develop excellently. The profit of the banking system at the end of July amounted to BGN 1.2 billion, which is 49.7 percent higher than that reported for the seven months of 2021, shows the summary statistics on the performance of the banking system, which the BNB publishes monthly base.

A number of reasons determine the positive trend. So, for example, banks have reduced the provisions set aside, and the costs for the impairment of financial assets have decreased by 27.9% compared to those charged a year ago. At the end of July, they amounted to BGN 244 million. In fact, the trend is in line with the general European trend – while in 2020 creditors provided heavily due to the expected future losses due to the pandemic, in 2021 and in this year greater moderation is reported.

Net interest income increased by almost BGN 150 million on an annual basis to BGN 1.58 billion, which is a growth of 9.52% – mainly due to the boom in lending. Loans for non-financial enterprises increased (by BGN 612 million, 1.4%), to households (by BGN 420 million, 1.3%), to other financial enterprises (by BGN 235 million, 4.2 %), as well as those for the public administration sector (with BGN 27 million, 3.1%). The net income from fees and commissions also reported strong growth – as of July, by over 21% on an annual basis to BGN 830 million.

Bank assets in July rose by BGN 3 billion, or 2.1% on a monthly basis, to BGN 145 billion. Compared to a year earlier, the increase was 11.1% (BGN 14.5 billion) . Compared to the end of June, deposits in the banking system increased by BGN 2.9 billion (2.4%) to BGN 124.7 billion.

The regulatory capital of the banking system is BGN 15.4 billion, and the total amount of risk exposures amounts to BGN 73.2 billion. The ratio of total capital adequacy of the banking system is 21.09%, of Tier 1 capital – 20 .68%, and the basic equity capital of the first tier – 20.16%, thus the levels remain significantly above the regulatory requirements and the requirements for capital buffers.

The article is in bulgaria


Tags: profit banks Bulgaria increased July

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