The Bulgarian banking sector booked BGN 1 078.6m net income in Q2’25, up by 8.7% YoY (+BGN 86.4m), registering the best quarter in history. The FX gains (+BGN 120.3m), other operating income (+BGN 68.6m) and lower contributions to resolution funds and deposit guarantee schemes (-BGN 46.3m) were the main reasons for the profitability improvement. The increasing loan portfolio had marginal positive effect as the net interest income added 0.7% YoY (+BGN 9.1m) to BGN 1.4bn. On the other hand were the lower gains from securities (-87.5% YoY; -BGN 156.3m) and the increasing administrative cost (+BGN 17.4m). Total operating income (TOI) increased 3.2% YoY (+BGN 63.9m) to BGN 2bn. Credit provisions also helped profitability coming BGN 19.1m lower at BGN 122.4m. For the 6-months period, the numbers show BGN 2bn net income, +8.7% YoY, which is also a record profit for this time of the year. The main drivers for the growth were similar to the ones in Q2 alone with most notable one being the BGN 211.7m improvement of the FX gains. It is worth noting that 89.3% of the total FX gains were booked by one bank - Unicredit Bulbank. 12-m trailing ROE of the banking system came to 16.8% vs 17.0% at end of Q1. The breakdown by the 23 banks and branches operating in Bulgaria shows that Unicredit Bulbank booked 28.8% of the sector’s H1’25 profit, followed by DSK bank with 26.0%, UBB with 12%, Eurobank Bulgaria with 10.8% and Fibank with 5.6%. Total assets of the banking system increased 13.2% YoY to BGN 201.9bn, as the growth came mainly from the net loan portfolio (+13.1% YoY, +BGN 13.2m YoY). UBB remains the market leader by assets for ninth consecutive quarter with 19.88% (+0.44 p.p.) share followed by DSK bank with 18.74% (-0.16 p.p. QoQ), Unicredit Bulbank with 18.40% (+0.08 p.p. QoQ), Eurobank Bulgaria (12.05%, +0.10 p.p. QoQ) and Fibank (7.84%, -0.20 p.p. QoQ). Gross loans to non-credit institutions increased by 12.8% YoY as the growth was across most segments - corporate loans (+7.4% YoY, +BGN 3.8bn), mortgage loans (+28.4% YoY, +BGN 6.9bn), consumer loans (+14.8% YoY, +BGN 2.9bn) and other financial institutions (+4.4% YoY, +BGN 0.4bn). The 90-days overdue loans ratio increased to 1.99% compared to 1.90% at end of Q1, while NPE ratio came to 3.36% (2.99% of total loans and advances) from 3.34% (2.96% of total loans and advances) at end of Q1.