Bulgarias banking sector assets add 6.2% y/y at end-Oct 2011.

By bne IntelliNews December 1, 2011
The value of the banking sectors assets increased by 6.2% y/y to BGN 76.1bn (EUR 38.9bn) at the end of October and accounted for 99.3% of the full-year GDP projection, central bank data showed. Assets declined by 0.6% in monthly terms after expanding in the previous five months. Loans and advances rose by 5.9% y/y to share of 84.2% of total assets. Credit institutions and corporate loans had the largest contributions expanding by 29.3% y/y and 5.1% y/y, respectively, as compared to 27.3% y/y and 5.2% y/y at the end of September. The government sector and the non-credit institutions had negative contribution. Credits to households rose for a second month in a row speeding to 0.2% y/y from 0.1% y/y a month earlier. The decline of consumer loans narrowed further to 1.8% y/y from 2% y/y at end-September while the mortgages continued growing though at a lower rate of 2.3% y/y at the end of October as compared to 2.4% at the end of September. IntelliNews comment: Credit activity will remain sluggish in view of the deteriorating prospects before the EU economies. This will also continue to impact negatively banks profitability. The recently announced intention of Austrian parent banks to limit financing to local subsidiaries may in addition raise the cost of lending as local banks should turn to more expensive sources of financing such as attracting more deposits from the local market.

Bulgarias banking sector assets add 6.2% y/y at end-Oct 2011.

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