BULGARIAN BANKS NET PROFIT FALLS TO 46M LEVA IN JANUARY

The combined profit of Bulgarian banks stood at 46 million leva in January 2011, down by 27 per cent compared with the same period of the previous year, the latest figures of the Bulgarian National Bank (BNB) show.

Impairment charges continued to rise in the period, reaching 111 million leva, up by 28 per cent against January 2009. According to BNB, impairments were fully covered by income generated from core activities.

Despite these costs, Bulgarian banks managed to generate a positive financial result, which adds to the undistributed profit for 2010 and "strengthens the capacity of the system and of individual banks to offset the negative impact of the deteriorating loan portfolio," the central bank said.

Profits were weighed down by expenses made to cover non-performing loans and by the lower income due to subdued lending, a trend that has persisted since the start of the financial crisis.

In monthly terms, household loans shrank by 48 million leva to 18.5 billion leva, while consumer loans edged down by 0.4 per cent to 9.272 billion leva. Housing mortgages inched down 0.1 per cent to 9.258 billion leva in January, while corporate loans climbed 0.4 per cent to 34.1 billion leva.

Household deposits increased by 200 million leva to 28.238 billion leva in the period, while corporate deposits stood at 62.7 billion leva, up by 563 million leva compared with December.