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

July 11, 2017

Preview Citation

Format: Chicago

Bulgaria: Financial Sector Assessment Program: Technical Note - Non-Performing Loans Reduction Strategy, (USA: International Monetary Fund, 2017) accessed November 8, 2024

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.

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

Keywords: Accounting practice, Balance sheet, Bank capital, Bank financing, Bank management, Bulgarian bank, Collateral, Collateral valuation, CR, Credit risk, Debt forgiveness, Global, Interest income, International Financial Reporting Standards, ISCR, Loan loss allowance, Loan loss provisions, Loans, Loss allowance, Nonperforming loans, NPL market, Retained earnings, Write-off policy

Publication Details

Pages:

58
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2017/201
Stock No:

1BGREA2017004
ISBN:

9781484308462
ISSN:

1934-7685

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