Ups and downs were recorded as a series of major banks reported their profits for the first nine months of 2006.
DZI Bank, part of the DZI Group, posted a 2.78 million leva profit to the end of September, an increase over the 2.48 million leva for the first nine months of 2005.
The bank's net interest income grew 57 per cent to 23.48 million leva, while revenue from fees was 13.79 million leva.
DZI Bank said that its assets totalled 1.06 billion leva as at the end of September. Its credit portfolio stood at 463.38 million leva and deposits were 943.62 million leva.
At the end of September this year, Greece's EFG Eurobank Ergasias signed a contact for the acquisition of 74.26 per cent in DZI Bank for 157.76 million euro.
Bulgarian commercial bank MKB Unionbank, majority-owned by Hungary's MKB Bank, said on October 31 that its nine-month net profit decreased by 67.7 per cent to 3.498 million leva in spite of higher net interest and dividend income.
On the same day, Postbank, majority owned by Greece's EFG Eurobank Ergasias, said that its nine-month net profit rose 57.6 per cent to 22.4 million leva. Postbank now has more than 130 branches and offices in Bulgaria, and is represented in about 2300 post offices across the country.
The bank operates more than 130 branches and offices across the Black Sea country of 7.7 million people. It is also present in some 2,300 post offices in Bulgaria.
Following the acquisition of DZI Bank, EFG Eurobank is to merge DZI Bank with Postbank. At the end of September, Postbank ranked as the seventh-largest bank by assets in Bulgaria.
The net profit of Central Co-operative Bank (CCB) for the first nine months of 2006 increased by a massive 92 per cent year-on-year to 8.53 million leva.
CCB's net interest income was 26.82 million leva, up from 21.15 million leva a year ago. The bank's assets grew 35 per cent to 1.09 million leva.
The deposits totalled 909.47 million leva compared to 665.13 million leva.
CCB's loan portfolio grew to 516.9 million leva from 375.1 million leva. October 30, 2006 was the last day on which investors could subscribe shares from the capital increase of the bank. CCB will increase its capital 72.75 million leva from 48.5 million leva. The funds raised will be used for expansion of the bank's loan portfolio.
The net profit of Economic and Investment Bank (EIBank) for the first nine months of 2006 soared to 26.88 million leva from 4.92 million leva for the same period of 2005, the bank reported. The significant growth can be attributed mostly to the reintegrated credit provision, which rose to 33.96 million leva from 5.99 million leva. Its net interest income grew 34.4 per cent to 15.82 million leva. EIBank's assets as at end-September 2006 totalled 1.29 billion leva from 1.18 billion leva in the beginning of 2006. The bank has extended 491.17 million leva in loans. Deposits stood at 1.11 billion leva.
Meanwhile, it was announced on October 27 that First Investment Bank (FIB), Bulgaria's sixth largest bank, has arranged a 185 million euro loan from a syndicate of 33 banks led by Bayrische Landesbank. This is the biggest syndicated financing approved for a local bank by far. FIB said that the deal was designed to support general and commercial lending. FIB has reported total assets of 2.6 billion leva as of the end of June or 7.3 per cent of all assets managed by the commercial bank system in the country.
It has been one of the fastest growing lenders in the past 10 years but is witnessing some slowdown this year at an asset growth of just 3.7 per cent year-on-year as of the end of June.
Not everything on the banking news front in the past week was rosy, however.
According to figures released by Bulgarian National Bank, suspect loans in the country's banking system have increased to 1.4 billion leva, an increase of 19 per cent in 12 months.
The figures emerged just as it was announced that an easing of credit restrictions will make lending by banks easier from the beginning of next years.
According to the central bank's figures, the share of bad loans versus total loans had edged down to 7.36 per cent from 7.47 per cent three months earlier. That share rises to 10 per cent if loans given in the past 12 months are not taken into account.
In terms of banking sector assets, the classified exposures amount to four per cent.
Going by Bulgarian National Bank figures, the trend is that retail loans, and specifically consumer loans, continue to post the fastest growth of quality deterioration. Bulgarian banks had 605 million leva in non-performing retail loans on their books by mid-2006, including 406 million leva in consumer loans and 199 million leva in mortgage loans.
Classified commercial credits fell to 770 million leva by mid-2006 from 781 million leva at end-March.
As many as 78 per cent of classified exposures are on the loan-books of the biggest domestic banks, up from 74 per cent a year earlier.
In another major banking development in the past week, Bulbank chief executive Levon Hampartzoumian said that UniCredit Bulbank will be the name of the huge banking entitty that will be created after the merger of Bulbank, Hebros Bank and HVB Bank Biochim, all part of the UniCredit Group.
The new bank, with 3.4 billion leva in assets, will replace DSK Bank as Bulgaria's biggest lender. The merger would be finalised by the end of the first half of 2007, Hampartzoumian said.
