Bulgarian banking Sector Hits Historic Profit Milestone in 2024
the Bulgarian banking sector has achieved a historic milestone, reporting a record-breaking profit of BGN 3.7 billion for 2024. This marks an 8.1% increase from the previous record of BGN 3.4 billion set in 2023, according to Mediapool. The impressive performance underscores the resilience and growth of the financial industry despite economic challenges.
Leading the Pack: DSK Bank and UniCredit Bulbank
dskunicreditbulbankplantodistributeover1/”>UniCredit Bulbank, which saw a significant profit surge to BGN 947 million, up from BGN 807 million in 2023.
Other Key Players
The third-largest profit was recorded by United Bulgarian Bank (UBB), with BGN 496 million, a modest increase from BGN 472 million in 2023. Postbank and FIB also contributed to the sector’s success, reporting profits of BGN 412 million and BGN 124 million, respectively.Driving Factors Behind the Success
The sector’s robust performance can be attributed to several factors. Banks have maintained low interest rates on deposits, enabling favorable margins on loans. This strategy has been supported by the Bulgarian National Bank (BNB), which has adopted lenient lending measures. Additionally, the sector has benefited from wage growth and high liquidity within the financial system.
Despite these gains, banks have faced increased costs related to problem loans. According to BNB data, impairment deposits for financial assets rose to BGN 659 million in 2024, a 60.3% increase from the previous year.
A Decade of Growth
The banking sector’s recovery has been remarkable since the downturn in 2020,when profits plummeted by over 50%. The rebound began in 2021, with significant growth in 2022 (BGN 2.1 billion, a 46% increase) and 2023 (BGN 3.4 billion, a 64% increase). This consistent upward trajectory has positioned the sector as a cornerstone of Bulgaria’s economy.
Proposed Tax on Bank Profits
The sector’s success has not gone unnoticed by policymakers. In response to the record profits, the government proposed a tax on bank over-profits. However, after informal discussions with bankers and opposition from the BNB, the idea was ultimately abandoned.
Key Highlights of the Bulgarian Banking Sector in 2024
| Bank | 2024 Profit (BGN) | 2023 Profit (BGN) |
|————————-|———————–|———————–|
| DSK Bank | 976 million | 1.006 billion |
| UniCredit Bulbank | 947 million | 807 million |
| United Bulgarian Bank | 496 million | 472 million |
| Postbank | 412 million | N/A |
| FIB | 124 million | N/A |
Looking Ahead
the Bulgarian banking sector’s record-breaking performance in 2024 highlights its adaptability and strength.With continued support from the BNB and favorable economic conditions,the industry is poised for sustained growth in the coming years. For more insights and updates,visit StandartNews.com.
