United Bulgarian Bank JSC - Sofia - Short Company profile

Bank profits in Bulgaria grow by over 7% to EUR 1.1 billion at the end of June The profit of the banking sector in Bulgaria for the first half of 2026 is 1.08 billion euros - 73 million euros, or 7.25%, above the figure reported a year earlier. And if we look at the second quarter alone - it is also a record 589 million euros. The return on assets remains close to 1.7%, the net interest margin remains at around 2.7%, and only the return decreases slightly (from 16.6 to 13.1%), but with the caveat that in the second quarter there may also be a seasonal component along with the distribution of annual dividends. With the entry into the eurozone, the minimum reserve requirements (MRR) decreased from 12% to 1%, the same as that applied by the ECB throughout the monetary union. This freed up a huge cash resource for credit institutions, which had been held at zero profitability in the BNB until now. These funds can now remain in the central bank, but banks now have access to the so-called ECB deposit facility, where the interest rate is currently 2.25%. Part of the funds can also be directed to lending, government securities and other instruments that bring profitability. Thus, for the first half of the year, net interest income jumped by 19.5% to EUR 1.69 billion. This brings EUR 276 million in positive contribution to the banks' profit. The picture is more mixed with net fee income. There, the effect of the euro is rather in the opposite direction, due to the loss of income from currency conversion. However, thanks to the growth of the economy and lending, growth continues to be seen here too - 4.2%, or EUR 18 million, to EUR 452 million, although much more modest than those realized in previous years. By June, banks reported spending on this line by EUR 82 million more on an annual basis. Which makes a 13% growth to almost 711 million euros. The main burden that limits the growth of profit is the impairment costs, which shot up by as much as 102 million euros to nearly 230 million euros. DSK Bank with 291.8 million euros managed to win first place in profit for the half-year, and this is also a record for a realized result by the middle of the year - slightly above last year's achievement of UniCredit Bulbank. DSK also maintained the leadership in assets, where it climbed in the previous quarter, dethroning UBB. With almost 24 billion euros in balance sheet, the division of the Hungarian OTP has nearly half a billion euros ahead of the Bulgarian bank of the Belgian KBC. In total, for the second quarter of the year, the banks' mortgage portfolios increased by another 1.16 billion euros, or 6%, to 20.4 billion euros. This is more than in the first quarter, and on an annual basis the increase of 27.3% remains close to the record values ??of almost 30%. The leader in retail banking DSK continues to be the most aggressive player among the large ones with a growth rate in mortgage lending of 36.6%, which is surpassed only by much smaller players in the segment with a low base. An example of the latter is Procreditbank, which added 130 million euros in housing loans and 66 million euros in consumer loans in a year, thus doubling its portfolios. At DSK, the annual growth in mortgage lending is more than ten times higher - 1.5 billion euros, with which it contributes nearly 35% of housing lending in the country. The picture is similar for consumer loans, with growth for the quarter being less than 5%, or 614 million euros, to 13.3 billion euros. The annual rate also remains lower and without significant change - nearly 15%. Here again DSK strengthens its position as a major player and contributes with 176 million euros, followed by Postbank (158 million leva). UBB and the segment-specialized TBI Bank remain below the 100 million euro mark. In corporate lending, the growth is more modest, with a quarterly increase of 2.3%, or 684 million euros, to just over 31 billion euros, and on an annual basis the growth is 11.3%. Here again DSK stands out with aggressive growth in percentage terms, but in nominal terms the leader in the business segment - UniCredit Bulbank (+198 million euros) has the largest contribution. UBB, on the other hand, reports a contraction of its corporate portfolios for the first time in a long time (-132.5 million euros). Just a few quarters ago, it had come menacingly close to number one in this segment, but now UniCredit Bulbank has again opened a sensitive gap with 6.5 compared to 5.7 billion euros for its competitor.