IMF Staff Country Reports

Bulgaria: Financial Sector Assessment Program: Technical Note - Non-Performing Loans Reduction Strategy

Publication Date:

July 11, 2017

Electronic Access:

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Summary:

This Technical Note examines the current state of nonperforming loans (NPLs) in Bulgaria and makes recommendations for a strategy to substantially reduce NPLs. The Bulgarian National Bank should adopt a comprehensive strategy in the near term to achieve a substantive reduction in NPL levels over a three- to five-year time horizon. The strategy should focus on more intensive measures to enhance bank practices in three main areas: (1) loan loss provisioning; (2) loan write-downs of NPLs, in whole or in part, where collection is unlikely; and (3) collateral valuation. This effort would be supported further by enhanced supervisory guidance, supervisory reporting, and risk disclosure.

Series:

Country Report No. 2017/201

Subject:

Banking Collateral Financial institutions Financial regulation and supervision International Financial Reporting Standards Loan loss provisions Loans Nonperforming loans