Sat, Feb 11 2012

Bulgarian banks face rapid growth of bad loans, central bank stress test shows

Fri, Jul 31 2009 15:39 CET

byAlex Bivol

2405 Views
Bulgarian banks face rapid growth of bad loans, central bank stress test shows

Bulgarian National Bank

Photo: Ivan Grigorov

Bulgarian banks could see the share of bad loans in their portfolios rise to 16.5 per cent by the end of the year, a stress test of the Bulgarian banking sector by the Bulgarian National Bank (BNB) showed, Dnevnik daily said on July 31.

BNB has been carrying out stress tests quarterly since the end of 2002, but it was the first time that it made the results public, Dnevnik said.

Bad and restructured loans accounted for 4.6 per cent of the total portfolio of the Bulgarian banking system at the end of June 2009, made worse by the slowdown in lending activity.

Nevertheless, the banking system was healthy, according to the BNB stress test. Bulgarian banks could be forced to write off between 1.95 billion leva and 3.31 billion leva in assets by the end of the year, which would lower their capital adequacy ratio to between 14.5 per cent and11.6 per cent, respectively, from the current 17.6 per cent.

The mandatory level of captial adequacy that banks in the European Union have to maintain is eight per cent.

The stress test results showed that the Bulgarian banking system was stable, as were its two main segments - subsidiaries of foreign banking groups and domestically-owned lenders, Dnevnik quoted BNB as saying.

  • Print
  • Send via email
  • Translate to
  • Share:

To post comments, please, Login or Register.


Please read the The Sofia Echo forum comments policy.

Bulgaria deposit rates increase by 40 per cent, loan costs up 11-20 per cent

APR on local-currency home loans rose by 15.3 per cent in the 12 months to July and their euro-denominated counterparts have gone up by 7.5 per cent. Consumer loans have seen APR soar by 24 per cent if in leva and 24.4 per cent if in euro.

Bulgarian banks break into September 2009 with cuts to loan rates

One of the market’s top five lenders, announced it will lower the interest on new housing mortgages from September 2009, the fourth in a string of Bulgarian banks to bring down loan rates over the past couple of months.

Three billion reasons

In one year, the ratio of bad loans in Bulgaria doubled and started looking mildly worrisome

Bulgaria’s deposit war cools - central bank

The effective annual rate has shed 16 basis points to 7.99 per cent for local-currency household deposits and 18 points to 6.34 per cent on euro-denominated products. Lev-denominated corporate deposits come with a lower rate of 6.36 per cent. The return companies can generate from euro-denominated deposits has inched up to 4.4 per cent.

Loan defaults in Bulgaria crossed five per cent benchmark in July 2009

Latest stress tests by Bulgarian National Bank showed that if the IMF’s forecast of a seven per cent decrease in GDP for 2009 comes true, bad loans will increase to 16.5 per cent of all, yet the system will retain its stability.

Much ado about nothing: Bulgaria c-banker set to get second term

Central bank governor Ivan Iskrov surprisingly submitted on August 20 a resignation letter for his second term in office, only to be nominated for the job again by the ruling GERB party later in the day.

Bulgarian Cabinet looks to replace currency board head

BNB governor Ivan Iskrov will keep his post as a way to guarantee the stability of the banking system, but his deputy in charge of the currency board would be replaced.

More in this category

Average monthly salary in Bulgaria rose in Q4 2011, statistics institute says

In the fourth quarter of 2011, the average monthly salary increased to 727 leva, 4.9 per cent higher than in Q3, the National Statistics Institute says.

Global food prices rebound, FAO says

For the first time in six months, global food prices rose overall in January 2012, the UN Food and Agricultural Organisation said.

Bulgaria mulls tighter regulation of bank fees - updated

The package will be discussed with the Association of Bulgarian Banks before the amendments are submitted to Parliament.

Bulgarian ICT Watch event in March

Debate at the half-day event will cover what has been achieved so far and what further can be done by the Bulgarian Government to support development of the market.

Movers and shakers

Selectivity, not popularity, is the driving force behind Sofia's most exclusive members' only club.

Appointments

British Council

British Council

Lyubov Kostova was appointed country manager of British Council Bulgaria effective January 1, replacing Tony Buckby, who left in October 2011 to take a similar position at British Council Greece. Kostova has been with British Council Bulgaria for 11 years, as public communications manager and, since 2008, as the head of project and partnerships department. Prior to joining the British Council, Kostova was head of international activities at the National Academy for Theatre and Cinema Arts (NATFIZ). She has a degree in Indian studies from Kliment Ohridski Sofia University.

CEZ

CEZ

Stefan Apostolov is the new chief executive of CEZ Razpredelenie Bulgaria, the power transmission subsidiary of Czech energy company CEZ in the country. He replaces interim chief executive Ales Damm, who remains the chairperson of the CEZ Razpredelenie management board. Apostolov has 30 years of experience in the energy sector, joining CEZ in 2007 as director of customer service and was later appointed as head of business development. Apostolov has a master's degree in electric systems from the Belorussian National Technical University in Minsc, management diplomas from Open University London and New Bulgarian University, as well as a master's degree in business administration from Plovdiv University.

BASF Bulgaria

BASF Bulgaria

Valentina Dikanska is the new general manager of chemical industry giant BASF subsidiary in Bulgaria, taking over from Herbert Fisch, BASF vice president for Southeastern Europe. Dikanska, who started her career as an expert in the Finance Ministry, joined BASF Bulgaria as director of finance and administration in 2002. She becomes the first Bulgarian to hold the top management position in the company in its 40-year history on the Bulgarian market. Dikanska holds a master's degree in economics from the University for National and World Economy in Sofia.

Rompetrol Bulgaria

Rompetrol Bulgaria

Alexander Albin has been appointed chief executive of fuel distributor Rompetrol Bulgaria, replacing Nichita Sorin, who left to become chief executive of Rompetrol Gaz in Romania. Albin was previously chief executive of Rompetrol Georgia. He has more than 15 years of experience in the oil and gas industry; prior to joining Romania's oil group Rompetrol in 2008 as an adviser, he oversaw operations at Atyrau refinery in Kazakhstan, owned by Rompetrol's parent company KazMunaiGaz. He previously held top management positions at two other leading Kazakh oil and gas companies.

© 2000-2012, Sofia Echo Media Ltd.

Web Design by RIZN

Sofia Echo Media is part of the Economedia Group.
The news and information content on this website is provided by our editorial team and is copyrighted. Any unauthorised reproduction or use of it is strictly forbidden. Reproduction of this website's content is permitted only with prior written permission from the Editor-in-Chief, should be propertly acredited and provide an active link back to our site. Comments posted by the website's visitors are independent of the editorial materials and do not represent the views of sofiaecho.com. Sofia Echo Media cannot be held responsible for the statements contained in visitor comments. The percentаge change in the shares' prices are based on the price of the last transaction of the current session compared to the price of the last transaction of the previous session. Bulgarian Stock Exchange data is not real-time, but updated every 15 minutes, and should not be used as a basis for decisions about buying or selling stock options.