Lending in Bulgaria rose by a paltry 0.29% month-on-month in October, slackening its pace form a 1.7% increase the previous month, according to data of the Bulgarian National Bank (BNB). The country's banks extended BGN 145 million more credits to businesses and individuals compared with September, the figures of the central bank show.
The September growth, similar to the levels a year earlier, was fuelled by banks' purchases of loans. Before the financial meltdown banks had been selling loan portfolios, but over the past months that trend has been reversed. Loan buybacks amounted to BGN 880 million in September but then slipped to BGN 176.5 million in October.
Business credits, excluding overdrafts, last month were almost flat on end-September, rising by barely BGN 17.5 million, or 0.08%. Consumer loans went up by 1.23% and mortgage loans increased 1%.
Bad credits emerge as the main challenge before the sector, with their volume rising by BGN 371 million in monthly terms to BGN 3.48 billion in October. Yet, growth slowed down a bit to 11.9% from 13.2% in September. Bad mortgage debt rose fastest, by 15.3%, followed by business credits (+11.3%) and consumer loans (+11.2%).
In October credits in arrears accounted for 9.08% of the overall volume of extended financing, up from 8.15% at the end of the third quarter.