Lending in Bulgaria gained momentum in September 2009, recovering to the growth rate posted year ago, according to the latest figures from the Bulgarian National Bank.

After a year of decline and minor growth, corporate loans gained 1.1 per cent  on the month in September, or 335.4 million leva. Households loans added 2.7 per cent, or 493.3 million leva, over that period.

On the flipside, annual growth was slack compared to the same month of 2008, with corporate loans picking up 3.7 per cent year-on-year to a total 30.8 billion leva at end-September. For the entire 2008, business loans rose by 33.1 per cent, down from a staggering 71 per cent in 2007.

The trend was mirrored in the retail segment, where loans moved up by 7.3 per cent in the 12 months ending in September against 31.4 per cent in 2008 and 52.2 per cent in 2007. The total household loans portfolio amounted to 18.9 billion leva.

Projections for a gradual rebound in lending volumes surfaced at the beginning of September, the first month of quicker growth after months of slow or no growth. Market sources said that a sustained recovery hinged on global economic developments and figures on both Europe and Bulgaria.

A string of banks opened September with lower rates on mortgages and business loans, fuelling forecasts of a tentative rebound in lending volumes.

Slowing growth and shrinking volumes went hand in hand with a steady increase in non-performing loans, which hit 3.113 billion leva at the end of September, up just over 13 per cent from August, when they soared 10.6 per cent on the month. Non-performing loans accounted for 8.14 per cent of the total portfolio of corporate and household loans and are expected to peak in 2010.

Source: Dnevnik