Banking System Overview 2023
ANOTHER RECORD YEAR WITH 64% YOY GROWTH OF NET INCOME, FUELLED BY THE RISE OF INTEREST RATES ON BUSINESS LOANS 2023 numbers show 64.4% YoY (+BGN 1.3bn) growth of net income to BGN 3.4bn, marking the best year in history. The 50.2% YoY (+BGN 1.6bn) growth of net interest income was the main reason for the improved financials. 12-m trailing ROE of the banking system continued improving for a twelfth consecutive quarter to 18.5% from 12.4% at end of 2022. The breakdown by banks reveals that DSK bank and Unicredit Bulbank booked 53% of 2023 profit, respectively BGN 1bn and BGN 806.7m while only one bank branch closed 2023 with a net loss.
The banking system marked the largest annual growth of gross loan portfolio (w/out loans to credit institutions) in 2023 by increasing BGN 11.3bn, +13.1% YoY. Mortgage loans segment was the biggest gainer with BGN 3.7bn increase (+19.9% YoY), thus supporting the real estate market, followed by corporate loans (+BGN 3.6bn, +7.9% YoY) and consumer loans segment (+BGN 1.9bn YoY, +11.8% YoY).
Despite the growth of interest rates worldwide, in Bulgaria they remained near the bottom reached in 2022 and only slightly reversing the multiyear downtrend. Only corporate loans registered more significant growth of interest rates while mortgage loans were marginally higher.
The quality of the loan portfolio kept improving with 90-days overdue ratio declining to a new all-time low of 2.27% of gross loans at the end-2023 compared to 3.18% at end-2022.
The consolidation of the sector continued as the merger of UBB and KBC Bank Bulgaria was completed while Eurobank acquired BNP Personal Finance – Bulgaria Branch.
First Financial Brokerage House (FFBH) is a leading non-banking financial institution on the Bulgarian capital market. Founded in 1991, FFBH offers the complete spectrum of investment banking services spanning corporate finance, privatisation advisory, mergers and acquisitions, financial consulting, brokerage services, research & analysis and asset management.
FFBH provides its services mainly to major international banks and corporations seeking investment in Bulgaria. FFBH is not only local contractor and partner to its clients but also an information source and provider for all major news and events in the economic and political life of the country.
We are the main contact point for the large majority of foreign and local institutional investors in the Bulgarian equity market. FFBH is providing access to the Bulgarian Stock Exchange by either its highly experienced sales trading desk or by order routing across the Bloomberg network.
Additionally, FFBH is offering a range of tools, specifically tailored for the retail investor. Both domestic and international markets are only a click away, via electronic trading solutions. As a major advantage, our customers are able to benefit from the broad range of Analysis & Research products with premium quality, provided by our team of dedicated analysts.
Clients of our research products are most of the largest foreign and local institutional investors looking for opportunities in Bulgaria. More than 100 investment banks, investment funds and other institutional investors use our Equity research and Economic review on a regular basis. FFBH’s Morning Bulletin and Weekly Bulletin reach more than 300 clients over different countries and continents.
Our major Research and Analysis Services include:
- Semi-Annual Outlook of the Bulgarian economy and the domestic capital markets;
- Equity analyses of the biggest and/or most liquid companies listed on Bulgarian Stock Exchange - Sofia;
- Quarterly Bulgarian Real Estate sector and REITs overview;
- Quarterly Bulgarian Banking System overview;
- Quarterly macroeconomic overeview, with details on the major economic sectors, commentaries, and statistical indicators;
- Daily and Weekly bulletins, including an overview of the capital markets and the most important macroeconomic & corporate events.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.