United Bulgarian Bank (UBB), a leading financial institution on the domestic market, announced its results for fiscal 2000 last week.

For the 12 months ending December 31, 2000, net profit, including that from single occurring events, was $12.3 million, down 15 per cent from a net profit of $14.5 million the previous year. Net profit excluding that from single occurring events remained $12.3 million, up 22 per cent over net profits of $10.1 million in 1999. The great difference between the profits in 2000 and 1999 reflects the sale of hard currency denominated government bonds, worth roughly $3.6 million, back in 1999.

"We are pleased with our achievement in fiscal 2000," said Stilian Vatev, Chief Executive Officer of UBB, addressing the press. "Disregarding single occurring events, UBB has achieved impressive growth in the difficult economic environment of 2000."

UBB was established in 1992 as a result of the merger of 22 Bulgarian regional commercial banks. Following the merger deal, the institution became the second largest bank in Bulgaria, behind Bulbank. In 1997, the institution was privatised with the National Bank of Greece becoming the majority owner with an 89.9 per cent stake, followed by the European Bank for Reconstruction and Development (EBRD) with 10 per cent, and the remaining 0.1 per cent being distributed among small investors.

UBB differs significantly from the majority of foreign financial establishments in Bulgaria. Unlike most of its competitors, which are focused exclusively on providing services to corporate clients, the bank also maintains a strong position in the private individual market segment. This is clearly demonstrated by the breakdown of UBB's client base. As of mid-2000, UBB had over 1.1 million private individual accounts and some 88,000 corporate and institutional accounts.

This strong individual client base has allowed the company to become a leading player in some very important market niches. "UBB is a market leader on the domestic debit card market. According to our estimates, UBB controls over 50 per cent of the bankomat network and over 60 per cent of the POS terminals," said Vatev. "The number of our debit card clients has skyrocketed from 65,000 in 1998 to over 250,000 in the first quarter of 2001," he said.

"The competitive advantage of UBB over the remaining foreign financial institutions in Bulgaria is that it has a big network of local offices," explained Nikolay Mihaylov, manager of new products development and sales at UBB. As of the middle of last year, UBB had some 54 branches and 83 sub-branches throughout the country.

"This large branch network has allowed UBB to quickly introduce new products nationwide and thus acquire market share," said Mihaylov. Here, the PC Banking service is a notable example. It accounts for over 90 per cent of UBB's electronic transactions and its volume, according to Mihaylov, is comparable to the total transactions of a mid-sized bank.

Pursuing its expansion goals, UBB recently introduced yet another package of new services to the market. These included, Internet banking, wireless banking, and telephone banking. As of the first quarter of 2001, the offering has attracted roughly 1,200 clients. By the end of the year, the client base is expected to surge dramatically. UBB is planning to launch a massive advertising campaign for those services in the second quarter.

The institute's new endeavour is facing little competition. The telephone service of UBB allows clients to perform basic transactions like payment of utilities, unlike the offerings of other banks that only provide information on account status.

The wireless service is similar to the telephone version, but with the added convenience of the cell phone - transactions can be conducted regardless of the client's location and proximity to UBB branches. In this arena, UBB is the only player in Bulgaria. "We expect huge growth in wireless banking," said Mihaylov. And recent reports that the cell phone subscriber base in Bulgaria numbers about one million seems to confirm these positive expectations.