Q1’25 net income of the Bulgarian banking sector registered 8.7% YoY (+BGN 71.5m) growth to BGN 889.4m. The FX gains (+BGN 91.4m) and the net F&C income (+BGN 46.5m) were the main drivers to the profitability improvement. The increasing loan portfolio also had positive effect as the net interest income added 1.5% YoY (+BGN 19.9m) to BGN 1.4bn. On the other hand were the lower (-36.8% YoY; -BGN 39.8m) gains from securities and the lower other operating income. Total operating income (TOI) increased 5.9% YoY (+BGN 109.5m) to BGN 2bn. Below the TOI line, administrative cost increased by 6.3% YoY (+BGN 41.4m) while credit provisions came BGN 8.7m lower at BGN 126.1m. 12-m trailing ROE of the banking system came to 17% vs 17.3% at end of 2024. The breakdown by the 23 banks and branches operating in Bulgaria shows that DSK bank booked 30.7% of the sector’s quarterly profit, followed by Unicredit Bulbank with 20.8%, Eurobank Bulgaria with 12.1%, UBB with 11% and Fibank with 5.6% while Bigbank AS - Branch Bulgaria was the only entity closing the period with a net loss. Total assets of the banking system increased 12% YoY to BGN 197.6bn, as the growth came mainly from the net loan portfolio (+14.3% YoY, +BGN 13.9m YoY) and the investment portfolio (+18.4% YoY, +BGN 5.3m YoY). UBB remains the market leader by assets for eighth consecutive quarter with 19.44% (-0.11 p.p.) share followed by DSK bank with 18.90% (-0.13 p.p. QoQ), Unicredit Bulbank with 18.32% (+0.10 p.p. QoQ), Eurobank Bulgaria (11.95%, +0.18 p.p. QoQ) and Fibank (8.04%, -0.18 p.p. QoQ). Gross loans to non-credit institutions increased by 14% YoY as the growth was across all segments - corporate loans (+9.1% YoY, +BGN 4.5bn), mortgage loans (+25.6% YoY, +BGN 5.9bn), consumer loans (+16.1% YoY, +BGN 3bn), other financial institutions (+7.5% YoY, +BGN 0.6bn) and state (+1.5% YoY). The 90-days overdue loans ratio declined to 1.90% compared to 1.95% at end of 2024, while NPE ratio came to 3.34% (2.96% of total loans and advances) from 3.44% (3.16% of total loans and advances) at end-2024.