Non-performing loans (NPL) in the Bulgarian banking sector have increased by 1.38% in six months, according to Bulgarian National Bank’s (BNB) data as of the end of June 2024. The growth in absolute value has surpassed over BGN 175 mln (EUR 89.48 mln) compared to December 2023. As a share they have remained almost unchanged, due to the credit activity – just over 2% of granted loans have been overdue more than 90 days, which makes them non-performing officially. 

The breakdown of BNB statistics, however, presents interesting trends – in the first half of the year loans, which had been overdue between 90 and 180 days, have decreased by more than 10%. Those that have been overdue more than 180 days, have risen by more than 11% in just six months. Separately, a growth of 7.5% has also been observed in loans that are unlikely to be paid on time, but their arrears have been within 90 days and until now they have still been considered regular, according to the European rules (see👇the chart).

Split by sector the most significant increase has been among corporate loans with delayed payments. Corporate loans have already exceeded BGN 50 billion (EUR 25.56 bln) as of end-June, but even the growth of new loans cannot compensate for that of overdue ones, and as a share of the portfolio they have been growing. It has been the other way around  within the segment of households – the expansion of credit portfolios has led to a drop in arrears below 2% as a share of the total portfolio.

The increase in household’s NPLs has been driven by consumer loans – their growth in just six months has reached nearly 17 percent. NPLs among mortgages have declined again, according to the latest data, including those with less than 90 days in arrears.

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