The profitability of the Bulgarian banking system in the context of the digital transformation

Abstract

The banking system is essential for the functioning of a country's economy. The stability of the banking system is based primarily on maintaining profitability and good liquidity. Bank profitability is one of the most important issues for the economy of any country and its bank security. It has a significant impact on key economic measures, such as gross domestic product, disposable income, development of the business environment and etc. This imposes the need to consider the dynamics and trends in the profitability of the banking system. This study examines the dynamics and causal links in the profitability of the Bulgarian banking system, for the period: from the country's accession in the European Union to the country's accession in the forefront of the Exchange Rate Mechanism (ERM II). As a result, the trend in the profitability of the banking sector in Bulgaria is positive, despite the hardships, the country faces, during the period 2007-2019. JEL: E42, G21