For the first time since June 2022, the value of non-performing fast loans (NPL) has increased, BNB data show. At the end of March overdue loans in the non-banking financial sector approached BGN 320 million, with a 5.7% growth for the quarter and nearly 11% on an annual basis. Growth in lending is keeping the share of NPL in portfolios low, below 7% at the end of March, down about half a percentage point year-on-year (see the chart).

There was a significant decline in NPL in the last quarter of last year. Then the portfolio of overdue loans decreased by more than BGN 40 million. Loan sales have an impact on the amount of receivables in the sector, according to the BNB. For the last 12 months, net sales amounted to BGN 93.1 million. Those sold exceeded BGN 100 million, and receivables purchased amounted to BGN 7.3 million. For the first quarter of this year the net value of sold loans was BGN 7 million. 

Companies specializing in lending have a different profile in terms of customers and the risk of loans granted. In this category are both subsidiaries of banks that offer consumer loans, as well as companies specializing in loans for consumer goods and those that grant loans even to people with a bad credit history.

No dramatic changes observed in terms and maturity in the first quarter. Loans with a maturity of more than 5 years continue to be the most sought after, and the total portfolio of them exceeds BGN 2 billion for the first time. This is a doubling, compared to 2018, and their growth is ahead of the average for the market. The weakest increase is in loans with a term of up to one year, there is a strong increase in loans with maturities between 12 months and 5 years.

Consumer loans to households remain the largest share of non-bank loans. Loans to real business companies increased above average, while interest in mortgage loans for households remained the weakest.

Read more news here.