PRESS RELEASE
26 June 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 Q3, 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 2026 Q1 the credit-to-GDP ratio, calculated according to the methodology published on the BNB website, stood at 78.3%. Its deviation from the long-term trend is negative (-15.0 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.
In Q1 2026 lending activity in the Bulgarian banking sector remained elevated amid ample banking system liquidity, favourable financing conditions and the country’s accession to the euro area. Strong labour market conditions and rising wages, as well as current historically-low interest rates on housing loans continued to stimulate households’ credit demand. The robust capitalization of the banking sector, its high liquidity and profitability strengthened its ability to provide credit. The steady deposit growth significantly contributed to credit supply. Following a pronounced increase in funding from residents in the months preceding the adoption of the euro in Bulgaria, during Q1 2026 it continued to grow at slower pace.
At the same time, the external environment is characterized by further increase of global uncertainty upon the onset of the war in the Middle East, expressed in sharp rise in energy prices and the related second-round effects. Assessing the impact of the elevated risks remains challenging in terms of their effect on financial markets, prices of commodities and energy products.
Against this background, maintaining the CCyB rate at 2.25% supports the capital position of the banking system and maintains banks’ resilience amid elevated lending growth and elevated global uncertainty.
Further information about the methodology used and previous decisions is available on the BNB website under the section Capital Buffers.
