Bulgaria’s banking sector still sound, central bank governor says

Bulgaria’s banking sector still sound, central bank governor says

 

By Alex Bivol

Bulgaria’s banking sector remains stable despite a difficult year, marked by political tension, a change of government and lengthy anti-government protests, Bulgarian National Bank (BNB) governor Ivan Iskrov said.

Iskrov said that Bulgaria’s banks maintained high capital adequacy ratios – at 17 per cent for the banking sector as a whole, it is well above the thresholds mandated by the EU – while the ratio of bad loans appeared to have reached a stable comments.

He said that he expected the banking sector to post an overall profit in the 500 million leva to 550 million leva range in 2013, roughly unchanged from previous years.

The central bank governor’s comments came during a cocktail on December 5, on the eve of the day that Bulgaria celebrates the feast day of St Nicholas, the patron saint of bankers.

Iskrov said that 2014 would bring new challenges for Bulgaria’s banking sector, though such challenges would not be the result of the economic environment, rather new European Union banking regulations.

Demand for bank loans in 2014 is expected to remain low, given the continued forecast for slow economic recovery in Bulgaria, he said. The main drivers of economic growth are expected to be private investment and Government spending, as well as household consumption, Iskrov said.

 

(Bulgarian central bank governor Ivan Iskrov. Photo: British Bulgarian Chamber of Commerce