Financial Crime World

Bulgarian Banks Meet Regulatory Requirements, Liquidity Levels Remain Strong

Sofia, Bulgaria - The Bulgarian National Bank (BNB) has announced that the country’s banking system has met its regulatory requirements for capital and liquidity buffers as of September 30th.

Capital Buffers

According to the BNB’s latest data, the banking system’s equity stood at BGN 4.7 billion, a decrease of BGN 0.2 billion compared to three months earlier. However, all banks in Bulgaria have successfully set aside required buffers to meet regulatory requirements introduced by the European Parliament and Council in May 2019.

Liquidity Levels

In terms of liquidity, the banking system’s coverage ratio remained strong at 281.9%, significantly above the minimum required level of 100%. The liquidity buffer increased by BGN 1.3 billion (3.8%) to BGN 36.3 billion during the third quarter of 2021, driven primarily by increased reserves in the central bank with an option for withdrawal.

  • Liquidity Breakdown
    • Coins and banknotes: 14.2%
    • Reserves in the central bank with an option for withdrawal: 49.6%
    • Assets with the central bank: 40.1%
    • Other liquid items: 56.5%

The total share of the three most liquid items rose to 57.3% as of September 30th, up from 55.4% at the end of June.

Loans-to-Deposits Ratio

The banking system’s loans-to-deposits ratio (LTD) remained relatively stable, standing at 68.1% as of September 30th, close to its level three months earlier.

Net Stable Funding Ratio

Additionally, the net stable funding ratio (NSFR), a key metric introduced under the Basel III framework, stood at 163.0%, comfortably above the minimum required level of 100%. Available stable funding reached BGN 103.7 billion, while required stable funding was BGN 63.6 billion.

  • Key NSFR Figures
    • Available stable funding: BGN 103.7 billion
    • Required stable funding: BGN 63.6 billion

All banks in Bulgaria have successfully met the NSFR requirement, which is reported quarterly by credit institutions in Bulgaria, excluding branches of foreign banks from EU Member States.

Conclusion

The strong liquidity levels and compliance with regulatory requirements demonstrate the resilience of Bulgaria’s banking system, according to the BNB.