Non-performing receivables in leasing have recorded their largest increase in a year and a half, according to data from the Bulgarian National Bank (BNB) for the last quarter of 2024. At the end of December, they were nearly BGN 114 million – a 22.8% increase compared to September. The last time there was a significant increase – by over 46% – was in June 2022. However, their share has consistently remained below 2% of the leasing portfolio of specialized companies (see the chart). The annual growth is analogous – 21.5%.
The data pertains to financial leasing, where the largest share of the portfolio consists of receivables with a period between one and five years. Typically, a large part of the companies’ portfolios comprises individual large contracts, and problems even with one major counterparty can affect the entire portfolio. The growth of non-performing leasing contracts is for the second consecutive quarter after several previous declines.
Financial leasing accounts for almost the entire leasing market in Bulgaria, while operating leasing is worth only BGN 370 million. Over half of the leasing in Bulgaria is for passenger cars; significantly fewer is for other vehicles, light trucks, as well as machinery and industrial equipment are purchased on installment plans. The main clients of financial leasing services are non-financial enterprises, i.e., the real business sector. Households also have a significant share – their contracts are primarily for acquiring a car. The growth of non-performing leasing loans has not negatively affected the financial results in the sector. According to BNB data, companies conclude 2024 with a profit of BGN 127.4 million, which is a 17% increase compared to 2023.
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