Bulgarians were loaned one billion leva by local banks in the past 12 months for the purchase of new homes, according to a first-half overview of the banking sector prepared by the Bulgarian National Bank (BNB).
The collective mortgage loan portfolio of the banks stood at 2.58 billion leva in late June.
The BNB data indicates that the demand for mortgage loans is picking up: mortgage loans disbursed in the first half of 2006 totalled 553 million leva against 499 million leva a year earlier.
The mortgage lending growth slowed to 71.3 per cent by end-June, but that is mainly due to the expanding base.
The banks added 304 million leva in consumer loans (35.6 per cent of total loans) and 458 million leva in corporate loans (60.8 per cent of total loans) to their portfolios in the first half of 2006.
Credits extended in the local currency account for 54 per cent of the banks portfolio. However, euro credits are on the rise and now 43 of every 100 loaned leva are borrowed in the common European currency.
Retail and corporate deposits increased by 842 million leva through June.
The first-half profit of the banking sector rose 64 million leva year-on-year to 342 million leva while the assets of the sector increased by about a billion to 36 billion leva.
The biggest Bulgarian bank by assets at the end of June was DSK Bank, owned by Hungarys banking group OTP, the BNB said. Second came Bulbank, one of the three Bulgarian-based banks of Italian banking group UniCredit, and the National Bank of Greeces United Bulgarian Bank (UBB) 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), the BNB has moved to slow growth in lending, blamed for the countrys widening current account gap.
The IMF expects a lending growth rate of 17.5 per cent in Bulgaria this year, while the central bank has said credit growth will not exceed 20 per cent.
