The aggregate net profit of the banking sector rose by 2.7% y/y to BGN 323.4mn (EUR 165.4mn) in H1 2012 on the back of a 70% y/y surge in net profit in June alone, central bank data showed. The strong growth during the month was driven mainly by a 7.4% drop in administrative expenses and 80% y/y lower provisions for impairment. The annual drop in net interest income however accelerated further to 13.8% y/y in June in continuation of the downward trend that started exactly one year ago as a result of contracted lending activity and high levels of deposit rates in the country. The cumulative net interest income also remained below its year-ago levels in H1 (down 9.8% y/y) as interest revenue dropped by 3.6% y/y and interest expense rose by 5% y/y. Net fees and commissions income also dropped by 1.4% y/y in Jan-Jun. The cumulative decrease in impairment expenses rose to 13.2% y/y in H1, compared to 9.5% y/y in Jan-May.
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