Deutsche Bank Expects More Non-Performing Loans in Bulgaria, Romania

Bulgaria's export sector is facing an increased risk, according to a Deutsche Bank report. Photo by ceoworld.biz

Non-performing loans in Bulgaria will continue to increase, according to an analysis of the Deutsche Bank financial group.

The Deutsche Bank report says, as quoted by Romanian news agency Mediafax, that Bulgaria and Romania are not recovering fast enough from the economic recession.

Because of the difficult economic situation and the increase of the unemployment, the portfolio of the non-performing loans for Central and Eastern Europe reaches the maximum expected values.

Deutsche Bank estimates that the risk in Bulgaria, Macedonia, and Serbia is 15-25% of GDP which is the highest in the region. Romania and Albania come second with a risk of 5-15%; the majority of states in Central and Eastern Europe are in a third group with a risk of 5%.

With respect to the real economy, the Deutsche Bank analysis says that export sectors in Albania, Bulgaria, and Macedonia have a 5-15% risk while the other states in Central and Eastern Europe are less vulnerable.

Hungary presents the highest risk connected to capital caused by the crisis in Greece, portfolio investments in this situation being 15-25% of GDP. The second category includes Bulgaria, Croatia, the Czech Republic, Estonia, Lithuania, Poland and Slovakia, and the third group with the lowest risk is Albania, Kazakhstan, Latvia, Macedonia, Romania, Russia, Serbia and Ukraine.

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