Q3’24 net income of the Bulgarian banking sector declined by 10.4% YoY (-BGN 106.2m) and by 8.3% QoQ to BGN 910.2m even though this is the third best quarter in the history. The rising interest rates and the increasing loan portfolio remained the main driving profitability factors. Net interest income reached a new record high at BGN 1.4bn (+8.8% YoY; +BGN 113.9m YoY). Net F&C income and FX gains also added to the profitability by increasing BGN 29.7m and BGN 74.1m respectively. Negatively affecting were the BGN 10.1m losses from securities vs BGN 89.5m gains in the comparable period of 2023 as well as the BGN 38.2m lower other operating income. Total operating income (TOI) added 4.3% YoY (+BGN 79.8m) to BGN 1.9bn, only 3.6% below than the previous record quarter (Q2’24). Below the TOI line there was an increase (+9% YoY, +BGN 56.6m) of administrative cost as well as surge (+117.4% YoY, +BGN 94.1m) of credit provisioning. The year-to-date numbers reveal BGN 2.7bn net income, +0.5% YoY, which is a new record for this time of the year. The main reasons were the growth of net interest income and net F&C income, while profitability was limited by the lower FX gains, higher administrative cost and loans provisioning. 12-m trailing ROE of the banking system came to 16.6% vs 17.8% at end of Q2 and 18.5% at end of 2023. The breakdown by the 23 banks and branches operating in Bulgaria shows that DSK bank booked 26.8% of the sector’s 9m’24 profit, followed by Unicredit Bulbank with 23.5%, UBB with 13.3% and Eurobank Bulgaria with 11.1% and while only Bigbank AS - Branch Bulgaria closed the period with a net loss. Total assets of the banking system increased 10.5% YoY to BGN 182.4bn, as the growth came mainly from the net loan portfolio (+13.2% YoY) and the investment portfolio (+30.7% YoY). UBB remains the market leader by assets for sixth consecutive quarter with 19.55% (+0.03 p.p. QoQ) share followed by DSK bank with 19.33% (+0.13 p.p. QoQ), Unicredit Bulbank with 17.98% (+0.08 p.p. QoQ), Eurobank Bulgaria (11.46%, +0.06 p.p. QoQ) and Fibank (8.06%, -0.09 p.p. QoQ). Gross loans and advances increased by 12.6% YoY as the growth was across most segments - corporate loans (+7.9% YoY, +BGN 3.7bn), mortgage loans (+24.3% YoY, +BGN 5bn), consumer loans (+16.1% YoY, +BGN 2.8bn) and other financial institutions (+6% YoY, +BGN 0.5bn). The 90-days overdue loans ratio declined to 2.15% compared to 2.29% at end of Q2’24, while NPE ratio came to 3.87% (3.55% of total loans and advances) from 3.99% (3.64% of total loans and advances) at end-Q2’24.