Bulgarian banks gave BGN 723.1 million worth of new loans in October, showed data of the central bank. New corporate loans topped BGN 316 million while households borrowed a fresh BGN 339 million. The remaining BGN 68 million went to BGN financial companies.
Loans to the non-government sector added up to BGN 48.5 million, or 73% of GDP, easing the growth pace to 44.5% year-on-year from 47.8% year-on-year in September. Loans to businesses rose 46.4% to just over BGN 30 billion, slowing from 50.2% in September. Household loans gained 40.7% to BGN 17.921 billion compared to 43.8% for the previous month.
Both growth and volumes decrease as the global financial fallout is making banks more stringent and customers are waiting to see what comes next, bankers say. The recent credit boom which spurred the market to an unprecedented growth triggered regulatory measures, according to experts.
The credit market zoomed 63.7% year-on-year at end-2007 after the central bank scrapped restrictions adopted in 2005. The step unleashed wild credit growth forcing the central bank to tighten the reserve requirement to 12% from 8% before from September 1, 2007.
Last month the watchdog said it would consider reserves 50% of the cash in bank vaults and allowed lenders to borrow up to 1% of their reserve at a market rate without any penalties. Home loans jumped 46.5% on the year through October against 49.5% year-on-year in September topping BGN 7.546 billion. Consumer loans slowed to 35.5% from 38.2% totaling BGN 7.335 billion.