The combined profit of Bulgarian banks dropped by 7.7% on the year to BGN 87.3 million in the first two months of 2011, the latest figures of the Bulgarian National Bank (BNB) show.

In February alone, the profit came in at BGN 41 million, down by BGN 5 million compared with the previous month.

Impairment charges continued to rise in the period, albeit at a slower pace, totalling BGN 213.6 million as at end-February, an annual increase of 11.4%.

Impairments were fully covered by banks' net interest income and income from fees and commissions, which stood at BGN 234 million and BGN 57 million, respectively.

Loans to businesses and individuals inched down 0.2% in monthly terms to BGN 52.588 billion in February but grew by 2.8% in annual terms. Consumer loans and housing mortgages amounted to BGN 9.257 billion and BGN 9.268 billion in the period, respectively.

Deposits of individuals edged up by 0.9% to BGN 28.5 billion in February, accounting for 45.2% of banks' combined attracted funds.