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Bad credit loans doubled within a year

Wednesday, 25 February, 2009

Bad credit loans register double growth during the last year. If in January 2008, they amounted to BGN 732,7, a year later this number reached BGN 1,4 billon, The Pari Daily reports. Corporate loans prove to be most problematic; their contribution to the total of bad credit loans is 56%.

Official statistics by governed by Ivan Iskrov BNB shows that banks in Bulgaria have allocated a little over BGN 10 billion of new corporate loans from September 2007 to September 2008. Despite the fact that by the beginning of this period, their total portfolio of corporate loans amounted to nearly BGN 20 billion, i.e. almost 50% growth. The last three months – from November 2008 to January 2009, the banks’ policy has turned to 180 degrees – they have only allocated BGN 276 million.

Bad consumer loans are also on the increase. If in December 2008 they amounted to about BGN 6 million, a month later the respective sum has already reached BGN 41,7 million. Bankers share the opinion that this is most of all due to the fact that many Bulgarians lost their jobs within the last two months. Others think that the reason is raising interest rates on old loans.

Source: http://www.focus-fen.net/