Bulgaria's leasing market continued to deteriorate in the third quarter of 2010, continuing the trend which started at the beginning of 2009, according to Bulgarian National Bank (BNB) data.

The share of non-performing leasing in the three-month period reached 18.4 per cent of the total leasing contracts, with receivables decreasing by four per cent in quarterly terms and 20 per cent on the year to 4.27 billion leva.

In the second quarter of 2010, leasing firms' receivables marked a 6.1 per cent quarterly drop and a 21.4 per cent annual decrease.

"The slowdown in the portfolio contraction rate was predicted at the beginning of the year," Plamen Pavlov, executive director of EFG Leasing, said.

Leasing firms blamed the sector's deterioration on the fragile economic environment, projecting that the trend would persist at least until the end of the current year because of the delay in the long-awaited rebound in economy.

Meanwhile, new leasing deals registered again a rise in the third quarter, increasing to 218.9 million leva in September from 210.9 million leva in June in terms of volume, but stalling their growth rate to 3.76 per cent versus 25.7 per cent.

Financial lease contracts, which currently account for 97.15 per cent of the total, climbed 6.34 per cent, or 12.7 million leva to 212.5 million leva.

According to Pavlov, however, the growth is not sufficient to offset payments on expiring contracts.

The lack of new deals resulted in a further increase in the share of non-performing leasing, which reached 18.4 per cent of the local firms' total portfolio versus 17.36 per cent in June and 16.4 per cent in March.


Source: Dnevnik.bg