Banking System Activity Increases in Second Quarter
During the second quarter, the assets of the banking system in our country increased by 2.1 billion BGN, reaching a total of 178.4 billion BGN by the end of June. Compared to the end of March, there was a notable increase in debt securities (by 3 billion BGN, 10.6%), mainly issued by the “public administration” sector. This was highlighted in an analysis by the Bulgarian National Bank.
Additionally, loans and advances also saw an increase (by 77 million BGN, 0.1%), while the size of the most liquid balance position – money, cash balances with central banks, and other sight deposits – experienced a decrease (by 1.2 billion BGN, 3.8%). As a result of this dynamic, the overall financial situation…
Analysis of the Banking Sector in June
During the period, the structure of total balance sheet assets in the banking sector showed an increase in the share of debt securities, reaching 17.6% by the end of June. Meanwhile, the share of cash, central bank balances, and other sight deposits decreased to 16.5% (compared to 16.1% and 17.4% at the end of March). Additionally, the share of loans and advances in the banking system’s assets stood at 62.2% by the end of June, slightly lower than the 62.9% recorded in March.
At the end of the first half of the year, the liquidity coverage ratio reached 246.7%, up from 243.3% at the end of March. The liquid buffer increased to 51.2 billion BGN, while net outgoing liquid flows amounted to 20.8 billion BGN.
Growth in Credit and Advances in the Banking System
During the quarter, there was an increase in gross loans and advances by 114 million leva (0.1%) to 114.2 billion leva. However, receivables from credit institutions saw a decrease of 3.9 billion leva (28%) to 10.1 billion leva by the end of June. The gross credit portfolio of the banking system increased by 4 billion leva (4%) to 104.1 billion leva.
Household loans showed a growth of 2.3 billion leva (5.5%) on a quarterly basis, while non-financial enterprises saw an increase of 1.4 billion leva (2.8%). Credits for other financial enterprises also rose by 306 million leva (3.6%).
State Management Sector
The state management sector has received a total of 66 million lev, which accounts for 7.8% of the total. As of the end of June, the gross non-performing loans and advances amount to 4.15 billion lev (compared to 4.27 billion lev at the end of March), with their share in the total amount of gross loans and advances being 3.64% (compared to 3.74% at the end of March). The net value of non-performing loans and advances (after deducting their inherent depreciation) at the end of June is 2.14 billion lev (compared to 2.25 billion lev at the end of March), with its share in the total net value of loans and advances being 1.93% (compared to 2.03% at the end of March).
Deposit Increase in the Banking System
During the second quarter, deposits in the banking system have seen an increase. This growth is a positive sign for the economy, indicating a higher level of confidence among depositors. The stability and growth of deposits are crucial for the overall health of the banking sector and the economy as a whole.
Financial Deposits Reach New Highs in June
In June, financial deposits in the country reached a record high of 152.3 billion leva, marking a 1.5% increase from the previous month. Household deposits saw a significant growth of 2.6%, amounting to 2.2 billion leva, while non-financial enterprises and the public sector also experienced increases in their deposits.
However, a decrease was observed in deposits held by credit institutions, which dropped by 5.1%, and other financial enterprises, which saw a decrease of 13.8%. Despite this, the overall capital of the banking system increased by 2.2% compared to the end of March, totaling 21.1 billion leva by the end of June.
This growth can be attributed to the rise in profits during the period, indicating a positive trend in the financial sector. Overall, the data suggests a strong performance in the country’s financial markets, with deposits reaching new heights and capital increasing steadily.
Positive Growth in Banking Sector
By the end of June, the banking system has reported a profit of 1.8 billion BGN, which is 121 million BGN (7.1%) higher than the first six months of the previous year. Net interest income has increased by 462 million BGN (20.4%) to 2.7 billion BGN at the end of June compared to the same period last year, while net income from fees and commissions has increased by 51 million BGN (7%) to 780 million BGN. Expenses for the impairment of financial assets, which are not recognized at fair value in the profit or loss statement, have also shown positive dynamics in the reserves and in the accumulated comprehensive income.
Record High Tax Revenue Collection in June
In the last month of June, tax revenue collection reached a record high of 276 million leva. This amount represents a 50.1% increase compared to the first half of the previous year.
