site.btaTotal Assets of Banking System Reach BGN 191.6 Bln, Up 11.4% Y/Y

At the end of the fourth quarter of 2024, the total assets of the banking system reached BGN 191.6 billion, growing by 11.4%, year-on-year (y-o-y), show data of the Banking Policy and Analyses Division at the Association of Banks in Bulgaria (ABB), published on Tuesday.

As of December 31, 2024, the loans and advances accounted for 61.2% of the total assets and were equal to BGN 117.3 billion. Cash balances amounted to BGN 34.1 billion and comprised 17.8% of the total assets. The securities portfolio comprehended 17.3% of the total assets (BGN 33.1 billion). In the fourth quarter of 2024, the total equity of the banking system increased by BGN 1,050.1 million or 4.8% on a quarterly basis to BGN 23.2 billion. As of end-December 2024, the total equity increased by 15.7%, compared to the same period of the previous year.

At the end of the fourth quarter of 2024, the banking sector reported a net profit of BGN 3,694.8 million, rising by 8.1% y-o-y. The net profit grew by BGN 277.97 million as an absolute positive change compared to the same period of the previous year when it amounted to BGN 3,416.9 million. The financial result of the banking system is influenced by the rising interest income and the improvement of the quality of the credit portfolios of the banks.

As of the end of Q4 2024, the total net operating income of the banking system amounted to BGN 7.867 billion, increasing by 13.7% y-o-y (from BGN 6.916 billion as of the end of December 2023). The bank’s net interest income increased by 14.9% y-o-y (BGN 4.846 billion as of December 2023) and as of the end of December 2024 it reached BGN 5.566 billion. The net interest income reflects the difference between the revenue generated from a bank’s interest-bearing assets and the expenses associated with paying on its interest-bearing liabilities. As of December 31, 2024, the interest income grew by 14.4% y-o-y to BGN 6.726 billion. The interest expenses amounted to BGN 1,160.7 million, rising by 12.4 % on an annual basis.

In Q4 2024, the net interest income made up 70,7% of the net total operating income of the banking system. As of the end of Q4 2024, the net fee and commission (F&C) income increased by 9.9% y-o-y to BGN 1,619.7 million. As of the end of December 2024, the F&C revenues increased by 11.7% on an annual basis to BGN 2,079.9 million. F&C expenses increased by 18.8% on an annual basis reaching BGN 460.2 million as of the end of the fourth quarter of 2024. As of end-December 2024, the net fee and commission income comprised 20.6% of the total net operating income of the banking system.

As of the end of Q4 2024, the administrative expenses, including overhead costs, increased by 12.1% (BGN 265.3 million in absolute terms) compared to the same period of 2023 as they reached BGN 2,464.9 million. The total operating expenses (administrative expenses and depreciation) grew by 11.5% y-o-y to BGN 2,786.1 million.

The capital position of the banking sector remained robust as the capital adequacy ratios continued to exceed the minimum regulatory requirements significantly.

The volume of non-performing loans (past due more than 90 days, excluding items Central Banks and Credit Institutions) decreased towards the end of December, reaching levels of BGN 2.159 billion compared to the end of September 2024, when they amounted to BGN 2.295 billion. The share of non-performing loans to gross loan portfolio in the banking system decreased from 1.97% as of September`24 to 1.79% as of end-December’24, according to the calculations based on the data of the BNB Banking Supervision Department. The share of non-performing loans to non-financial corporations decreased from 2.59% as of the end of September 2024 to 2.30% at the end of December 2024. Over the reviewed period, the ratio of mortgage loans decreased from 0.49% to 0.44%. The share of nonperforming consumer loans decreased from 3.78% to 3.60% as of the end of Q4 2024. The amount of non-performing loans to non-financial corporations decreased from BGN 1.321 billion as of the end-September 2024 to BGN 1.214 billion as of the end-December 2024. The non-performing mortgage loans decreased to BGN 120 million (down from BGN 126 million a quarter earlier).

The total amount of deposits in the banking system continued to rise. As of the end of December 2024, the total deposits of the banking system reached BGN 140.428 billion, picking up by 10.1% y-o-y. The deposits’ growth is faster compared with the reported increase of 9.7% reported at the end-September.

At the end of the fourth quarter of 2024, there was an increase in interest rates on newly contracted consumer loans in BGN and EUR and on loans in BGN for enterprises. In the same period, there was a decrease in interest rates on loans in EUR for enterprises and housing loans in BGN and EUR. With regard to deposits, there was an increase in interest rates in BGN for enterprises and households and a decrease in interest rates on deposits in EUR.

As of the end of December 2024, the average interest rate on deposits with agreed maturity in BGN to households (new business) increased to 1.07% (from 1.02% a quarter earlier). The average interest rate on deposits in EUR decreased and they reached 1.49% (from 1.77% a quarter earlier). As of the end of Q4 2024, the average interest rate on deposits with agreed maturity to nonfinancial corporations (new business) in BGN increased from 1.70% to 2.46%. The average interest rate on deposits in EUR decreased from 2.36% to 2.03%.

At the end of Q4 2024, the average interest rate on mortgage loans in BGN slightly decreased to 2.50% (from 2.53% a quarter earlier). The average interest rate on mortgage loans in EUR decreased from 3.09% as of end-September`24 to 2.80% as of end-December`24.

As of the end of December 2024, the average interest rate on consumer loans in BGN increased from 9.05% % in Q3 to 10.03% in Q4 2024. Concurrently, the average interest rate on consumer loans in EUR increased from 4.01% in Q3 2024 to 4.42% in Q4 2024.