In the third quarter of 2024, deposits in the banking system of our country increased by 1.8%, with bank loans also increasing by 1.8%, according to the latest BNB report "Banks in Bulgaria".
During the period July - September 2024, deposits in the banking system increased by BGN 2.8 billion (by 1.8%) to BGN 155.0 billion. compared to the previous three months (April - June).
Household deposits grew the most significantly (by 1.7%, or BGN 1.4 billion), with growth also recorded in deposits of non-financial corporations (by 2.1%, or BGN 1.0 billion), credit institutions (by 5%, or BGN 550 million), and other financial corporations (by 6.2%, or BGN 221 million), while deposits of the "general government" sector decreased by 10.5%, or BGN 441 million.
At the same time, the total amount of bank gross loans and advances increased by BGN 2.1 billion (by 1.8%) to BGN 116.3 billion at the end of September 2024 compared to the previous quarter. Claims from credit institutions in the third quarter of last year decreased by 4.1% (by BGN 416 million) to BGN 9.6 billion, according to BNB data.
At the same time, the gross loan portfolio of the banking system grew in the third quarter of 2024 by 2.3% (by BGN 2.4 billion) and reached BGN 106.6 billion, mainly due to the increase in loans to households (by 5.3%, or by BGN 2.3 billion) and to non-financial enterprises (by 0.6%, or by BGN 299 million). An increase was also observed in loans to the "general government" sector. (by 4%, or by 37 million leva), with a decrease in loans to other financial enterprises (a decrease of 2.6%, or by 231 million leva).
The banking system reported a profit for the first nine months of 2024 in the amount of 2.7 billion leva, similar to that achieved for the same period of the previous year. The main contribution is from net interest income, the prerequisite for which is the 11 percent growth in gross interest-bearing assets over the last twelve months.
Credit activity remains high, contributed by a combination of factors in the supply and demand of credit. On the one hand, household demand is affected by the increase in real disposable income and by the low levels of interest rates on housing loans. On the other hand, the active supply of credit resources by banks is determined by the growth of the deposit base, significant liquidity and competition in the banking sector, the BNB notes in its report.
In the third quarter of 2024, the banking system continued to operate in conditions of increased uncertainty in the external environment and under relatively favorable macroeconomic conditions. The main positive contribution to economic growth was made by the continuing strong private consumption, which is due to the increase in employment and wages in real terms, as well as the weak incentives for households to save given the low interest rates on bank deposits.
The capital position of credit institutions remains solid, and liquidity in the banking system - at high levels. With regard to the main inherent risk - credit, the long-term trend towards a decrease in both the amount of non-performing loans and their ratios remains. The share of non-performing loans in the loan portfolio decreased slightly in the third quarter, according to the latest quarterly report of the Bulgarian National Bank.