A more or less similar trend is observed in the consolidated reports of the Fibank group, where over the last year the profit has increased by nearly BGN 4.05 million (34.35%), to BGN 15.84 million. At the same time, for the period there was an increase in loan loss provisions from BGN 17.15 million to BGN 23.86 million, given that the Bulgarian banking sector as a whole has reduced this expense of vital importance for financial and capital sustainability by BGN 30 million.
The above figures indicate that First Investment Bank treats credit risk responsibly and continues to invest in increasing its stability. For years, Fibank operated with more expensive funding than its direct competitors, relying mainly on the local deposit market. And it did great, regardless. Thanks to timely management decisions, the cost of funding is now equalized, which places the bank in an extremely favorable position compared to competition in Bulgaria.
It should also not be overlooked that the bank has reported a growth in exposures without increase of credit risk from BGN 4.3 billion to BGN 4.45 billion. At the same time, exposures with significant increase of credit risk have dropped from BGN 1.02 billion to BGN 970 million over the first quarter. There was an increase in non-performing exposures but only by BGN 2.2 million, while exposures 90+ days overdue decreased by almost BGN 14.6 million.
If we return to the profitability of the bank, reports show an increase in net interest income by BGN 2.1 million (3.41%), and in fee and commission income by BGN 1.5 million (6.16%). For the same period (March 2020 - March 2021), the net interest income of the Bulgarian banking sector as a whole has shrunk by nearly 3%, while fee and commission income has increased by about 4.33 percent. In other words, Fibank has fared quite well in means of operating income and if these results are maintained, it may well continue with its conservative approach to provisioning, and/or have better options to increase its equity. /BGNES
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Author: Petar Iliev, https://money.bg/