The Bulgarian banking system reported Q1’26 net income of EUR 489.9m, up by 7.7% YoY (+EUR 35.2m). The improvement was mainly driven by 16.4% YoY (+EUR 115.8m) increase of net interest income and a sharp 236% YoY growth in gains from securities (+EUR 82.5m). These positive effects were partly offset by a swing to FX loss of EUR 2.6m from a gain of EUR 43.5m in Q1’25, a 131.8% YoY (+EUR 85m) rise in credit provisions and a 12.7% YoY (+EUR 45.1m) increase in administrative expenses. The breakdown across the 23 banks and branches operating in Bulgaria shows that DSK Bank accounted for 28.6% of the sector’s Q1’26 profit, followed by UniCredit Bulbank with 27.2%, Eurobank Bulgaria with 11.7%, UBB with 11.1%, and Fibank with 5.3%. Total assets of the banking system expanded by 3.5% QoQ (+18.3% YoY) to EUR 119.5bn. Growth was mainly driven by the net loan portfolio (+3.9% QoQ, +EUR 2.5bn), a 29.2% QoQ increase in receivables from credit institutions (+EUR 2.6bn), and a 12.6% QoQ rise in investment portfolio (+EUR 2.5bn). Deposits also added 1.7% QoQ (+EUR 1.5bn). DSK Bank moved to the first place by assets with a 19.66% market share (+0.72 p.p. QoQ), followed by the previous leader UBB (19.35%, -0.25 p.p. QoQ), UniCredit Bulbank (17.26%, -0.81 p.p. QoQ), Eurobank Bulgaria (11.69%, -0.18 p.p. QoQ), and Fibank (8.38%, +0.57 p.p. QoQ). Gross loans to non-credit institutions increased by 4% QoQ, with growth recorded across most segments. Mortgage lending posted the strongest increase (+5.3% QoQ, +EUR 1bn), followed by corporate loans (+3.5% QoQ, +EUR 1bn) and consumer loans (+3.3% YoY, +EUR 0.4bn). Asset quality started to deteriorate since the beginning of the year, with the 90-day overdue loans ratio increasing to 2.01% from 1.76% at end-2025. The NPE ratio stood at 3.31% (2.82% of total loans and advances), compared with 3.10% (2.72%) at end-2025.