PRESS RELEASE
31 March 2026
The Governing Council of the BNB set the countercyclical capital buffer rate applicable to credit risk exposures in the Republic of Bulgaria at 2.25% for 2027 Q2, under an assessment of the countercyclical capital buffer rate in pursuance with Article 5, paragraphs 3 and 4 of Ordinance No. 8 of the BNB (27.04.2021) on Capital Buffers, the Combined Buffer Requirement, Restrictions on Distributions and the Guidance on Additional Own Funds (Ordinance No.8 of the BNB).
Pursuant to Article 5, paragraph 3 of Ordinance No.8 of the BNB, setting of the countercyclical buffer rate shall take into account the reference indicator, calculated in accordance with Article 5, paragraph 1 of Ordinance No.8 of the BNB, the European Systemic Risk Board (ESRB) guidelines, as well as other variables that the BNB considers relevant for measuring the cyclical systemic risk. At the end of 2025 Q4 the credit-to-GDP ratio, calculated according to the methodology published on the BNB website, stood at 77.6%. Its deviation from the long-term trend is negative (-16.9 pp), which corresponds to a value of zero for the reference indicator.
As the standardised measure for the deviation of the credit-to-GDP ratio from its long-term trend does not adequately reflect the cyclical risks’ tendencies, the assessment of the countercyclical buffer rate incorporates additional indicators which are focused on developments in the credit market, indebtedness, real estate market as well as the general economic outlook.
Credit activity in the non-government sector remained strong in 2025 Q4. In terms of credit demand, the trend was driven by the persistently favourable labour market conditions and historically low mortgage interest rates. Key factors determining credit supply were the high capital and liquidity capacity of the banking system.
At the same time, the uncertainty in the external environment continues to be a factor with amplifying effect for credit risk materialization. Continued deterioration of geopolitical risks has the potential to worsen the economic conditions, which could impact borrowers’ debt servicing capacity. In view of outlined risk factors and the expectations for continued high credit growth rates, the increase of the countercyclical capital buffer to 2.25% as of the second quarter of 2027 strengthens the capacity of credit institutions to cover cyclical risks and thus safeguards the stability of the banking sector.
The calibration of the countercyclical capital buffer also takes into account the effects of the introduced lending standards requirements for new and renegotiated loans secured by residential real estate, effective from October 1, 2024. The measure is in addition to the capital buffers and together with them forms a macroprudential policy framework, in which the instruments are defined, monitored and calibrated periodically, after analysing complex amount of data.
Further information about the methodology used and previous decisions is available on the BNB website under the section Capital Buffers.
