At the end of December the total assets in the banking system stood at BGN 59.1 billion (30.217 bln euros). In the fourth quarter of the year a BGN 7.2 billion (13.8%) increase was reported, and just in December assets rose by BGN 4.1 billion.

The banking sector assets rose by BGN 16.9 billion (40%) in a year. In the quarter under survey, the growth of the banking business was financed primarily with deposits and subordinated liabilities attracted in the system, and with the banks' increased equity. The greatest increase in absolute terms was reported by loans and receivables (including financial leases) – BGN 5.9 billion, followed by cash and cash balances with central banks.

The increase in the financial assets available for sale and in those reported at fair value through profit or loss, fully compensates for the decrease in the positions held for trading and held to maturity. The balance sheet consolidation that took place in two credit institutions in November and the subsequent change in the largest banks group practically brought about no significant changes in the market shares held by different groups. At the end of December, the group of five leading credit institutions had a 56.5% share in the balance sheet total of the banking system, and Group 2 banks – a 38.6% share.

The gross loans and advances reported a three-month long growth of 15% and came up to BGN 45.9 billion. More than half of the growth is accounted for by four credit institutions – three of Group 1 and one of Group 2. System-wide, the loans to enterprises, which have increased by BGN 3.2 billion, contributed most. Retail exposures mark a BGN 1.5 billion growth, and claims on credit institutions – a BGN 1.2 billion growth. Housing mortgage loans and consumer loans increased with similar amounts, however the quarterly growth rate of the first portfolio is higher. In the quarter, a decrease was reported in the classified exposures in absolute terms (BGN 4 million).

This accounts for the improved share of classified loans and advances of enterprises and retail exposures in the gross loan portfolio of corporate customers and natural persons up to 4.4%. At the same time, a review of the classification structure of loans indicates an increase in the share of the high-risk group („nonperforming loans”), both in the three-month and one-year horizon. As a whole the levels of bank stability indicators remain good.

Financial liabilities measured at amortized cost (attracted funds) in the quarter increased at a higher rate than balance sheet assets. A BGN 6.6 billion growth is reported in the quarter, half of which is provided by non-residents (mainly credit institutions). The funds attracted from institutions other than credit ones increased as part of deposits and repurchase agreements, thus providing additional resource of BGN 2.3 billion. The participation of credit institutions amounts to BGN 1.9 billion and is formed by the increase in the deposits and long-term financing. The deposits of individuals and households increased by BGN 1.7 billion and at the end of December they had the second in importance share in the total amount of attracted funds in the system - 36.4%.

In the period September – December, the balance sheet aggregate total capital increased by BGN 608 million. Six credit institutions increased their issued share capital, and two banks allocated additional premium reserve. Thus, on system level the share capital and premium reserve increased by BGN 315 million altogether. The current year income increased by BGN 289 million. In a year horizon the equity of the banking sector increased by BGN 1820 million (41.5%).

The unaudited bank reports indicate that the 2007 profit of the banking system is BGN 1144 million – by BGN 336 million (41.6%) more than in 2006.

In the last quarter of 2007, the capital position is influenced by the credit growth continuing throughout the period. Some banks reported a more significant reduction of excess capital. At the end of December the overall capital adequacy ratio of the banking system is 13.8% (against 13.9% as of 30 September 2007), and the level is kept owing to a great extent to the increase in the instruments eligible as tier two capital.

The liquidity in the banking sector at the year end remains good (Bulgarian National Bank).