NPLs in Bulgaria fell to 8.5%

Non-performing loans (NPLs)  in Bulgaria fell to 8.5% at the end of September, BNB says. Only three months earlier the level of NPLs  was 9.3%, wich make the country fifth in the EU.

The improvement in the June-September quarter is most likely due to the sale of large bad credit portfolios, which clears the balance sheets in the banking system. The value of overdue debt amounted to BGN 7.4 billion at the end of September. This is in line with growth on lending, with a total of 2.7 billion leva being issued for three months.

The trend is very good, and if it remains, by the end of this year bad loans will fall more as a share of all. At the end of last year NPLs were more than 10% in Bulgaria. According to data of the The Association of the Collection Agencies in Bulgaria in the first half of this year were concluded deals for about BGN 585 million of bad loans.

According to BNB data the most overdue loans amount to BGN 4.9 billion. These are loans with more than 180 days of delay in payment. By comparison at the end of the first half of the year, they were 5.2 billion levs. At the end of September loans for 2.1 billion leva are overdue to 90 days or are classified as risky.

According to the latest data, Bulgaria will most likely overtake Italy (9.7% bad loans by June) and will come closer to neighboring Romania (6.4%). In Romania the reason for the decline is the large deals for NPLs sale, with which banks clear their balance sheets. The average level of bad credit in the EU is 3.6% in the first half. The worst situation is in Greece, Cyprus and Portugal.

“The banks and the business”will be the topic of the Banking and Business Conference, organized by Economedia, the publisher of Capital newspaper, on November 20th. Georgios Christoforou, BHolding’s regional director for Southeastern Europe (SEE), will be a speaker at the conference. Christoforou will be a speaker in the panel focused on NPL market, sharing the experience and practice of B2Holding, that owns Debt Collection Agency (DCA). See more details here.