The banking system reported 30.5% growth in its profit in the first five months of the year. As of May 31, 2021, it is BGN 622 million – BGN 145 million more than the reported result for the first five months of the previous year, the BNB announced.
The reason for the improved financial result is mostly higher revenues from fees and commissions compared to last year, according to BNB data. In addition, the costs of impairment of possible bad loans have decreased.
Net fee income increased by 18%, BNB data show. Under this item, banks have collected BGN 558 million from their customers for the first five months of the year, compared to BGN 476 million in 2020. With a steady increase in fees for several years, banks are trying to compensate for the reduced profit from low interest rates. on loans. In the last 12 months, however, commercial banks have sharply increased the fees for servicing the counter and current accounts, and the fees for using ATMs and bank cards have also been increased.
At the same time, banks’ interest rates on interest rates are almost at last year’s level. As of May 31, 2021, banks received a net of BGN 1.115 billion under this item, while last year the amount was BGN 1.080 billion (3% growth).
In addition to low interest rates, this result is also affected by the partial moratorium on loans introduced due to the coronavirus in April 2020. As of the end of May, loans totaling BGN 9.66 billion were deferred. Of these, BGN 7.548 billion belonged to companies and BGN 2.112 billion to households.
Expenditures incurred to cover possible bad loans at the end of May were BGN 203 million, or BGN 57 million (22.0%) less than accrued a year earlier.
Commercial banks received BGN 99 million in dividends from their subsidiaries. Last year the amount was almost twice as high – BGN 176 million.
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