The Bulgarian banking system reported Q2’26 net income of EUR 589.2m, up by 6.9% YoY (+EUR 37.8m), registering the highest quarterly profit in the history. The improvement was mainly driven by 22.6% YoY (+EUR 160.1m) rise of net interest income, the 246.2% YoY growth in gains from securities (+EUR 28.1m) and the 6.7% YoY (+EUR 14.7m) increase of net fees&commissions income. These positive effects were partly offset by the 92.3% YoY (-EUR 66m) drop of FX gains, the 11.8% YoY (+EUR 42.1m) increase in administrative expenses, the 49.8% YoY (-EUR 20.9m) decline of other oerating income and the 27% YoY (+EUR 16.9m) rise in credit provisions. For the H1’26 period, net income reached EUR 1.1bn, up by 7.2% YoY. The main factors for this dymanic were similar to the ones in Q2’26 alone. The positive contributions were the EUR 275.9m growth of net interest income and the EUR 110.6m surge in gains from securities, while on the negative side were the EUR 112.1m decline of FX gains, EUR 101.9m rise of credit provisions and EUR 87.3m increase of administrative expenses. The banking system’s 12-month trailing ROE declined to 13.5%, compared with 13.9% at end-Q1 and 14.4% at end-2025. The breakdown across the 23 banks and branches operating in Bulgaria shows that DSK Bank accounted for 27% of the sector’s H1’26 profit, followed by UniCredit Bulbank with 24.9%, UBB with 13%, Eurobank Bulgaria with 10.6%, and Fibank with 6.3%. Total assets of the banking system expanded by 1.3% QoQ (+17.2% YoY) to EUR 121bn. Growth was mainly driven by the net loan portfolio (+4.1% QoQ, +EUR 2.7bn), 9.4% QoQ increase in receivables from credit institutions (+EUR 1.1bn) and 2.8% QoQ increase of investment portfolio (+EUR 0.6bn) while cash in central banks decreased by 18.6% QoQ (-EUR 3bn). Deposits added 1.3% QoQ (+EUR 1.2bn). DSK Bank remained a market leader by assets with a 19.82% market share (+0.17 p.p. QoQ), followed by UBB (19.43%, +0.08 p.p. QoQ), UniCredit Bulbank (17.10%, -0.16 p.p. QoQ), Eurobank Bulgaria (12.07%, +0.37 p.p. QoQ), and Fibank (7.99%, -0.39 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 (+6% QoQ, +EUR 1.2bn), followed by corporate loans (+2.3% QoQ, +EUR 0.7bn) and consumer loans (+4.9% YoY, +EUR 0.6bn). Asset quality deteriorated slightly, with the 90-day overdue loans ratio increasing to 2.12% from 2.01% at end-Q1 and 1.76% at end-2025. The NPE ratio stood at 3.12% (2.65% of total loans and advances), compared with 3.31% (2.82% at end-Q1.