S&P maintains Bulgarian banking system risk assessment at group 7.

By bne IntelliNews November 10, 2011
International credit rating agency S&P says that it has maintained the Banking Industry Country Risk Assessment (BICRA) on Bulgaria at group 7 (1- lowest risk banking system; 10- highest risk), the economic risk score - at 7 and has assigned an industry risk score of 6. The economic risk score of 7 shows "high risk" in "economic resilience" and "economic imbalances," and "very high risk" in terms of "credit risk in the economy". Local banks are still affected by the ongoing economic slowdown and S&P expects the ongoing macroeconomic imbalances correction to continue to weaken the banking sector in the next 2-3 years. The "very high risk" assessment of credit risk in the economy comes as a result of the banks' relaxed lending practices and underwriting standards credits concentrated in real estate, construction, and development; high share of foreign currency denominated credits, slow collateral enforcement. The industry risk score of 6 reflects "high risk" in its "institutional framework," "intermediate risk" in its "competitive dynamics," and "high risk" in "system-wide funding". S&P says the government is supportive toward the local banking system.

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