After the January slowdown in domestic credit growth, Bulgarian National Bank (BNB) said that it had recorded 2006s second month-on-month lending decline in May.
BNB said that the credit portfolio of local banks contracted by 0.2 per cent month-on-month up to the end of May. The adjustment, which did not affect equally all types of loans, was most evident in commercial lending which fell 260 000 leva month-on-month.
Mortgage loans rose five per cent month-on-month, a growth rate roughly matched by consumer loans.
The ongoing shift of loan exposures abroad is partially responsible for the plunge in corporate lending because banks prefer to transfer overseas mainly business loans.
According to BNB data, Bulgarian lenders have expatriated 1.5 billion leva including 997.2 million leva in corporate loans.
The combined net profit of the banks reached 326.68 million leva for the January-May period, up a hefty 63 per cent compared to the same period a year ago.
The credit portfolio of Bulgarian commercial banks reached 19 billion leva (9.7 billion euro) at the end of May, up 16.9 per cent from a year earlier, BNB said.
Bulgarian banks deposits portfolio totalled 27 billion leva at the end of May, up 24.7 per cent from a year earlier.
The biggest Bulgarian bank by assets at the end of May was DSK Bank, owned by Hungarys banking group OTP. Second came Bulbank, one of the three Bulgarian-based banks of Italian banking group UniCredit, and the National Bank of Greeces United Bulgarian Bank was third.
The loan portfolio of Bulgarian banks rose by 33 per cent in 2005, slower than the 50 per cent growth recorded in the previous year. Urged by the International Monetary Fund (IMF), BNB has moved to slow growth in lending, blamed for the countrys widening current account deficit.
The IMF expects a lending growth rate of 17.5 per cent in Bulgaria this year, while BNB has said credit growth will not exceed 20 per cent.
