Profits of the banking system drop to BGN 402 mln

The depreciations of financial institutions increase by 20% per month. However, their revenues grow.

The profits of the Bulgarian banking system decreased by nearly 28% between January and late July, compared to the same period last year, according to the data of BNB (Bulgarian National Bank). During the first seven months, credit institutions in our country recorded a positive financial result of BGN 402 mln. However, 12 months earlier, it was BGN 547 mln. Despite the registered profit reduction, its rate of decline is falling. At the end of July 2009, compared to the same period of 2008, the slump was 35%, showed BNB statistics. We would like to remind our readers that in 2009 the positive results of the banks dwindled by half.

Experts reported that in July the parameters and indices of financial institutions did not undergo substantial changes, and the amount of the loan portfolio rose slightly.
The continued growth of bad loans leads to increased growth of depreciation costs and of specific credit risk provisions, stated BNB officials.

The data showed that in July banks had additional depreciations of BGN 113 mln, or an increase of nearly 20% month-on-month. However, the Central Bank commented that financial institutions increased their financial and operating revenue by BGN 324 mln, or 17.1%. This, in turn, provides coverage of all operating costs and contributes to the accumulation of buffers in the system, explained experts. As regards the liquidity ratio, the coefficient calculated by BNB has been maintained at the June level and stands at 22.16%.