Bulgarian Banking System Overview H1 2019
H1’19 PROFITABILITY HITS NEW HIGH; AQR CONFIRMED THAT ALL 6 TESTED BANKS MEET THE PRUDENTIAL REQUIREMENTS
- H1’19 set a new record high profitability of the banking sector with ttm ROE of 13.5%, the highest over the last 10 years period. Net income surged by 14.6% YoY to BGN 918m on the back of 6.8% (+BGN 136m) growth of operating income as well as 11.8% (-BGN 24m) decline of credit provisions.
- Net interest income added 2.4% YoY (+BGN 33m) on both increase of interest income and decline of interest cost.
- The banking system continued to show robust growth in terms of lending activity. Gross loans increased 7.2% YoY (+BGN 4.2bn) with both retail and corporate segments growing by similar absolute amounts.
- H1’19 new business volumes registered the impressive 17.3% YoY growth while the decline of interest rates seems to be slowing down.
- The NPE’s ratio was down 0.9 p.p. YtD and 2.8 p.p. YoY to 10.26% of gross loans while coverage with provisions was up by 0.7 p.p. (-1.9 p.p. YoY) to 60.8%.
- Customer deposits amounted to BGN 86.5bn at end-June, growing by 8.2% YoY (+BGN 5.7bn) and by 2.9% (+BGN 1.9bn) compared to end-2018.
- On the basis of the asset quality review (AQR) results and post reference date developments, the BNB estimated that the capital adequacy of each of the six banks after potential adjustments from the asset quality review remains above the minimum regulatory requirements according to art.92 of Reg. 575/2013, namely 4.5% CET1, and 8% TCR.
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.
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