Banks close November with record assets and growing profits

November data paint a picture of a stable and highly profitable banking sector in Bulgaria. Despite growing write-downs financial institutions managed to increase their profits, with fees and commissions remaining a quiet but reliable source of revenue.

Data from the Bulgarian National Bank (BNB) for November show that the sector’s assets reached BGN213.8 billion, an increase of 2.7% in just one month. This is happening against a backdrop of strong growth in cash balances and stable lending but also with an increasingly significant contribution from net fee and commission income to banks’ financial results.

Profits are growing despite higher write-downs

As of November 30, the banking system reported a profit of BGN 3.4 billion, BGN 117 million more than in the same period of 2024. This growth was achieved despite increased impairment charges on financial assets, which reached BGN643 million, or 11.3% more on an annual basis. This means that banks’ operating income, including interest and fees, continues to offset higher costs and risks.

Fees – a stable source of income

The trend from the last few quarters continues, with income from fees and commissions growing steadily – by 10% year-on-year to BGN 2.1 billion in November. With moderate growth in lending and still high liquidity net fee and commission income remains a key driver of profits. Increased payment volumes, the maintenance of current accounts and more active use of banking services by households support this.

Loans and deposits: growth at different rates

The gross loan portfolio reached BGN125.6 billion, with the main contribution coming from loans to non-financial enterprises and households. Mortgage loans alone grew by BGN674 million in a month. At the same time deposits increased more moderately to BGN177.2 billion, with growth concentrated almost entirely in households. Business and government deposits decreased, suggesting a reallocation of funds and more active use of available liquidity.

Hyper-liquid system

The liquidity coverage ratio reached 251% – well above the regulatory minimum. The liquidity buffer is now BGN 58.6 billion, which gives banks considerable security but also raises the question of whether this liquidity is being converted into more accessible financing for the economy or remains “заключена” in low-risk assets.

Translated with DeepL.