Bulgarian banks set to resume lending

Bulgarian banks set to resume lending

Bulgarian banks have pledged to boost credit provision and curtail overdue loans after almost two years of subdued lending, according to participants in the ninth Banks, Investments, Money financial forum held in Sofia on Monday.

A prerequisite for a rebound in lending is the liquidity accumulated by local banks, which was determined by Postbank's executive director Asen Yagodin as "hot".

According to Gulubin Gulubov, executive head of Emporiki Bank, banks should now look at financing new projects to increase their earnings.

If credit growth was indeed poor in the past year, the trend has now started to diminish and the contraction in loan portfolios is likely to be restrained, Yagodin said.

In turn, Kristofor Pavlov, chief economist at Unicredit Bulbank, projected an increase of 4% to 4.5% in lending in 2011.

Since late 2010, local banks have observed a slowdown in non-performing loans growth, which is a sign that they have the capacity to deal with overdue credits, according to the bankers.

Over the past two years, financial institutions have mainly managed credit risk by renegotiating and restructuring existing loans, not granting new ones. /Source: Dnevnik/

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