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Bulgaria’s banking system stable although bad debts rising

Author: The Sofia Echo staff Date: Sat, Apr 21 2012 2811 Views
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Bulgaria’s banking system is stable even though it is now third in the European Union in the rate of bad loans, after bad loans had risen to close to 15 per cent year-on-year at the end of 2011, according to International Monetary Fund figures.
 
The rate of bad loans, which at the end of 2011 added up to about 8.3 billion leva (about 4.1 billion euro) put Bulgaria almost on a par with Romania, Greece, Ireland, Latvia and Lithuania, Darik Radio said.
 
However, in spite of the increasing amount of bad loans, Bulgaria's banking industry had managed to preserve its stability and boasted capital adequacy ratio of 17.5 per cent, one of the most adequate levels in the European Union.
 
Separately, Darik reported that, according to a survey by the Confederation of Independent Trade Unions in Bulgaria, only 13 per cent of households in Bulgaria had incomes above the cost of living.
 
According to the survey, in March 2012 a four-member household needed 2189 leva to cover normal costs of food, clothing and maintaining their home.
 
On an annual basis, this was an increase of 77 leva. The main reasons for the increased cost of living were increased excise duties on fuels and higher fuel prices.
 
The poverty line, calculated on the basis of a consumer basket of vital goods, was 206 leva. More than a fifth of Bulgarian households had incomes per family member that were lower than this figure, the trade union confederation said.
 
Over the past two years, the number of people with savings in the bank had halved, trade union confederation leader Plamen Dimitrov said.
 
He said that about 511 000 people had total savings of 32.5 billion leva, but close to half of these people had savings of up to 1000 leva while only to about 66 000 people had savings of more than 5000 leva.
 
Most of the population was growing poorer and only a small number of people were managing to save or get wealthier, Dimitrov said.
 

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