Raiffeisen says Bulgarias banking sector remains moderately profitable in 2011.

By bne IntelliNews June 7, 2012
The Bulgarian banking sector remained moderately profitable last year despite the ongoing rebalancing, Raiffeisen Research said in its latest CEE Banking Sector report. The lending activity remained low due to the tight lending policies and the high unemployment. Total loans increased by 4% driven mainly by the corporate segment on higher credit demand in trade, processing industries and professional services. The deposit base expanded by 12% on the year in 2011 supported by increased retail deposits. The banking sectors capital adequacy ratio stood at 17.5% as of end-2011, well above the regulatory minimum of 12%. Given its solid liquidity and capital position, the Bulgarian banking system is well placed to support lending in a friendlier domestic and external economic environment, which distinguishes the countrys banking sector from some of its peers in the SEE region, Raiffeisen said. The sectors profit dropped for the third straight year in 2011 due to higher provisions for classified loans and lower volume of new lending.

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