The credit portfolio of the Bulgarian banks grew strongly in April as well, and the share of non-performing (NPLs) and restructured household loans decreased, according to the monetary statistics of the BNB for April. In mortgage lending in particular, there has been a noticeable decline in delinquent loans in an absolute value.
So far, the data belies fears that low interest rates and easy access to mortgage loans could lead to problematic payments. The data shows a slight increase in problem loans in the segment of business credits.
As of April 30 Bulgarian banks have granted a total of over BGN 86 billion in loans, of which BGN 45.5 billion are loans to non-financial companies from the real economy and BGN 40.85 billion to households. The annual growth is 8.6% and 18.6%, respectively. The monetary statistics of the BNB are published on a monthly basis and may differ from the data of the quarterly statistics of the banking supervision.
As of April 30 Bulgarian banks have granted a total of over BGN 86 billion in loans, of which BGN 45.5 billion are loans to non-financial companies from the real economy and BGN 40.85 billion to households. The annual growth is 8.6% and 18.6%, respectively. The monetary statistics of the BNB are published on a monthly basis and may differ from the data of the quarterly statistics of the banking supervision.
NPL and restructured business loans are 8.45% of all, excluding overdrafts. This is 0.10 percentage points above the level of April last year. In an absolute value NPLs are up nearly 10% year-on-year, although there has been a decline in the past two months.
In the segment of household’s consumer loans the data shows a decline in NPLs and restructured – both as a share and as an absolute value, and currently they are just over 5% of the total loan portfolio. Mortgages, which in recent months have been the most discussed due to their strong growth, registered a clear improvement – they are problematic less than 1.2% of the total value, and their decline in absolute value for the year is 15.6%.
For another month a record was reached in the total value volume of lending, with the most noticeable growth in corporate loans to non-financial companies and mortgage loans to households (see the chart). In the real economy sector lending in April grew by a little more than a percentage point compared to March and by 8.6% on an annual basis. The growth of consumer loans for households is bigger – these are often granted in addition to mortgage loans, and therefore when loans for the purchase of a home grow, consumer loans also grow.
In recent months some economists have warned that lending in Bulgaria is growing too fast, especially in the mortgage loan segment, which is a prerequisite for a bubble in the real estate market. For now, fears of loan repayment problems remain unfounded, and competition and high liquidity in the banking system continue to keep interest rates at record lows. Just a weeks ago the BNB issued several recommendations to commercial banks to make a better assessment of their customers who want to withdraw a loan.
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