Bulgaria's October Corporate Default Loans Up 122% Y/YFinance | November 23, 2010, Tuesday // 16:03| views
The total of all late payments – over 90 days for business loans has reached nearly BGN 7 B in October. File photo
The share of Bulgaria's corporate default loans has reached nearly 19% in October without taking into account the overdrafts, according to Central Bank data.
In the last month the default loans are up by BGN 310 M.
Compared to October 2009, those loans are up 122%. In September, 2010, the share of the corporate default loans was 17%.
The total of all late payments – over 90 days for business loans is nearly BGN 7 B, meaning nearly 19% of all granted loans are problematic for the banks.
The same trend is observed in the area of consumer loans, even though the percentages there are lower.
For consumer loans there are BGN 1.3 B in uncollected mortgage payments for October or 15% from all mortgages. In September their share was slightly below 15%. Default consumer loans amount to nearly BGN 1.3 B as well or 17% of all consumer loans compared to 16% in September.
Experts point out default loans do not threaten so much the bank system, but the real economy because they lead to lower consumption and force banks to focus on reserves and limit the granting of loans.