On 28 April 2017, the Bulgarian National Bank (the “BNB”) published its annual report for 2016 (the “Report”). The Report presents an overview of the Bulgarian economy and describes the BNB’s activity over the past year.

The BNB confirms that it successfully completed its 18-month development program, which was adopted in 2015. As a result of its efforts under the program, lending has started to recover, the aggregate revenue of banks has increased, and the sector is consolidating. Further, in the Report, BNB notes that Bulgaria’s GDP increased by 3.4% on the year-on-year basis and unemployment fell to 7.6%.

The Report focuses on the Asset Quality Review and stress tests of banks active on the Bulgarian market. Despite the required corrections identified in the Report, the BNB stated that the capital buffers are generally in sound condition and that the authorities have taken a number of steps to ensure better supervision of the banking sector, in accordance with its banking supervision reform and development plan. Lastly, the BNB confirmed the ongoing process of consolidation on the market.