site.btaBNB Governor: Banking Sector Stable, Euro-Related Legal Changes to Be Introduced Soon

BNB Governor: Banking Sector Stable, Euro-Related Legal Changes to Be Introduced Soon
BNB Governor: Banking Sector Stable, Euro-Related Legal Changes to Be Introduced Soon
BNB Governor Dimitar Radev (BTA Photo)

In the current environment of uncertainty, the banking sector continues to stand firm with a solid capital and liquidity position and is ready to meet the new challenges. This is what the Governor of the Bulgarian National Bank (BNB) Dimitar Radev said on Thursday to the participants of the conference "Banks and Business", organized by the Capital newspaper.

In his words, the dynamics of the macroeconomic environment, which is strongly influenced by domestic and geopolitical factors, poses new challenges for the banking sector. The sector is facing these challenges in a strong position: institutionally and in terms of concrete indicators, Radev added.

The net value of non-performing loans for the last 12 months decreased by more than BGN 660 million. Their share represents 2.66% of the total net value of loans and advances, and their size is fully covered by the capital surplus above regulatory requirements and buffers, the BNB governor added.

"The profitability, measured by the amount of profit of BGN 1.7 billion, guarantees return on assets and capital and is a serious source of internal support for the banks' balance sheets when needed," Dimitar Radev further said.

Bulgaria's fiscal position remains solid with the second lowest debt-to-GDP ratio in the EU. However, the country's fiscal position faces serious potential risks. These are related to the highly disorderly budgetary process over the past two years and the emerging trend of a sustained loosening of fiscal policy over this period, he pointed out.

Regarding the euro area, Radev said that in the coming days legislative changes will be tabled to address the recommendations of the latest convergence report for Bulgaria. A separate law on the euro, the concept of which has already been presented by the finance ministry, is also at an advanced stage.

According to the BNB governor, the path towards the euro area has the potential to become a catalyst for processes that consolidate the political and macroeconomic framework.

"Despite the problems we are facing, Bulgaria is still well positioned in terms of the Maastricht criteria. Now, the only open issue for us is the inflation criterion, but things are not clear-cut regarding it either. On the one hand, inflation is at a high rate, not only in this country, but in the whole of the EU. On the other hand, in October, for the first time in more than a year, the rate of inflation in this country reversed its trajectory of steady increase. We will closely monitor how this process develops, but it must be actively supported by adequate anti-inflationary measures, including a sufficiently disciplined budget," the BNB governor added.




By 02:15 on 02.06.2023 Today`s news

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