Bulgaria: Banking sector profitability maintained
Overview:
Bulgaria is one of the economies recovering most slowly from the impact of the global economic crisis. Its fixed exchange rate regime to the Euro has aided financial stability but may also be slowing the turnaround at a time when many competing economies have improved competiveness via weaker currencies. With this in mind, it is notable that the Bulgarian banking sector has managed to maintain its profitability throughout the crisis even if this has inevitably been squeezed. While non-performing loans have risen they still remain relatively contained. Capital adequacy remains high. Returns on equity and assets have fallen but remain decent by regional standards taking into account the difficult macroeconomic situation. The situation should improve now as the economy finally returns to growth.