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Sat, May 26 2012
Bulgaria's banking sector has 'high potential for development'
Photo: Julia Lazarova
Use of banking services in Bulgaria has increased in 2010, Miroslava Georgieva of marketing agency GfK Bulgaria told a banking conference, quoting new statistics.
"There is high potential for development and further penetration of banking services," according to Georgieva.
She said that Bulgaria lags behind the average for the Central and Eastern European countries.
Austria, Slovenia and the Czech Republic boast the highest level of banking services penetration, whereas Bulgaria and Romania are falling behind.
GfK Bulgaria expects that the number of Bulgarians using banking services will increase alongside the requirements of customers interested in the management of their personal finances. The number of alternative financial services offered by companies other than banks is also anticipated to grow.
Different banking services are popular in different CEE countries. For instance, Czech, Slovakian, Austrian and even Russian banks are much more popular with savers than with borrowers.
By contrast, Bulgarians, Romanians and Hungarians go to bank offices mostly to take loans. GfK Bulgaria attributes this to Bulgarians’ lower income when compared to what CEE citizens are earning as well as the low awareness of personal finance planning.
According to a survey by GfK Bulgaria, just six per cent of Bulgarians say they have disposable money to save up. The country trails the CEE regions by this indicator, ranking even after Romania.
Meanwhile, lending rates in Bulgaria could resume creeping up to reflect the higher credit risk, a senior industry representative said on October 5 2010.
Assen Yagodin, deputy board chairman of the Association of Banks in Bulgaria (ABB) and CEO of Postbank, told an industry conference that the cost of consumer loans provided by local lenders should be affected by a new legislative provision enabling borrowers to return consumer loans within 14 days from taking without giving an explanation or paying a penalty fee.
He said that all measures being implemented in the Bulgarian banking sector legislation are designed to protect borrowers but not creditors.
For example, the law allows some business loan borrowers to retroactively announce insolvency before the date of taking the loan, which means that the liabilities are left with the bank.
Unless this legislative deformity is resolved, loan interest rates will go up because the higher credit risk translates into a higher loan price, he said.
Yagodin said that loan rates dropped by 0.8 per cent year-on-year in August, whereas deposit rates grew by 0.9 per cent over the same period. In other words, banks are taking in the consequences of the crisis, according to Yagodin.
"If one bothers to calculate the average interest rates on deposits and loans for businesses and households for the past two years, one will see that all this talk about unjustified high loan rates are groundless," he said.
ABB said a raft of Bulgarian banks will finish 2010 in the red but assured that the overall sector would remain in positive territory thanks to reserves accumulated from prior years and high liquidity.
Source: Dnevnik.bg
"There is high potential for development and further penetration of banking services," according to Georgieva.
She said that Bulgaria lags behind the average for the Central and Eastern European countries.
Austria, Slovenia and the Czech Republic boast the highest level of banking services penetration, whereas Bulgaria and Romania are falling behind.
GfK Bulgaria expects that the number of Bulgarians using banking services will increase alongside the requirements of customers interested in the management of their personal finances. The number of alternative financial services offered by companies other than banks is also anticipated to grow.
Different banking services are popular in different CEE countries. For instance, Czech, Slovakian, Austrian and even Russian banks are much more popular with savers than with borrowers.
By contrast, Bulgarians, Romanians and Hungarians go to bank offices mostly to take loans. GfK Bulgaria attributes this to Bulgarians’ lower income when compared to what CEE citizens are earning as well as the low awareness of personal finance planning.
According to a survey by GfK Bulgaria, just six per cent of Bulgarians say they have disposable money to save up. The country trails the CEE regions by this indicator, ranking even after Romania.
Meanwhile, lending rates in Bulgaria could resume creeping up to reflect the higher credit risk, a senior industry representative said on October 5 2010.
Assen Yagodin, deputy board chairman of the Association of Banks in Bulgaria (ABB) and CEO of Postbank, told an industry conference that the cost of consumer loans provided by local lenders should be affected by a new legislative provision enabling borrowers to return consumer loans within 14 days from taking without giving an explanation or paying a penalty fee.
He said that all measures being implemented in the Bulgarian banking sector legislation are designed to protect borrowers but not creditors.
For example, the law allows some business loan borrowers to retroactively announce insolvency before the date of taking the loan, which means that the liabilities are left with the bank.
Unless this legislative deformity is resolved, loan interest rates will go up because the higher credit risk translates into a higher loan price, he said.
Yagodin said that loan rates dropped by 0.8 per cent year-on-year in August, whereas deposit rates grew by 0.9 per cent over the same period. In other words, banks are taking in the consequences of the crisis, according to Yagodin.
"If one bothers to calculate the average interest rates on deposits and loans for businesses and households for the past two years, one will see that all this talk about unjustified high loan rates are groundless," he said.
ABB said a raft of Bulgarian banks will finish 2010 in the red but assured that the overall sector would remain in positive territory thanks to reserves accumulated from prior years and high liquidity.
Source: Dnevnik.bg
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Bulgarian corporate deposits increased in Q3 2010
According to Bulgarian National Bank (BNB) data, the number of corporate deposits went up by 3282 during July to September, or by 336.3 million leva to a total 12.23 billion leva.
Use of banking services in Bulgaria remains low
Despite the negative trend, however, the number of local banks’ customers has started to increase in 2010, reaching 57 per cent of the total population as at the end of September against 54 per cent a year earlier.
Bulgaria's banking sector heads for restructuring
Bulgaria's banking sector is likely to experience a reshuffle, which will mainly affect smaller financial institutions folowing suit with the restructuring of the European market caused by the financial turmoil.
Individual, household deposits key growth drivers of Bulgaria's banking sector
The banking system saw a 0.5 per cent decline in assets to 71.03 billion leva for April to June, with bad loans reaching 9.26 billion leva, accounting for 12.6 per cent of banks' assets in the period against 11.4 per cent a quarter earlier and 6.9 per cent in the second quarter of 2009.
Bulgarian banks boost July profit but growth slackens
Meanwhile, bad loans increased at a faster pace.
Rating Bulgaria
Banking system in Bulgaria remains stable thanks to parent companies and central bank measures, says S&P
Euro household savings, disposable income dropped in Q1 2010
In Bulgaria, the first half of 2010 saw households cutting spending and companies withdrawing funds from banks to prop their operations.
Bulgarian banks raise interest rates on euro mortgages
The interest rates on Bulgaria’s housing mortgages have increased for both lev and euro currencies in June 2010, according to the latest Bulgarian National Bank figures.
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Appointments
Employment Agency
Kamelia Lozanova has been appointed the executive director of the Employment Agency, a position she has held ad interim since September 2011, following the resignation of her predecessor Rossitsa Stelianova. Prior to that, Lozanova was the agency's deputy executive director in charge of international projects and European programmes. She has been with the agency for more than 20 years. Lozanova has a degree in Slavonic philology from the St Kliment Ohridski University of Sofia.
Uniqa
Gloria Dimitrova has been appointed executive director and member of the managing board at Uniqa Life Insurance Bulgaria. Dimitrova began her career in 1998 at the insurance supervision directorate, but moved to the private sector and worked for professional services and insurance brokerage firm Marsh&McLennan and US insurer AIG, both in Bulgaria and the Middle East. She joined Uniqa as regional director for Sofia in 2010. Dimitrova has a degree in economics from the University for National and World Economy in Sofia and a master's degree in insurance from the Business Academy in Svishtov.
Kamenitza
Yassen Lyubenov is the new head of marketing at Bulgarian beer brewer Kamenitza. Lyubenov has 12 years of experience in marketing in the fast-moving consumer goods sector and has started his career as assistant brand manager at Kraft Foods Bulgaria. He later became brand manager at Wrigley Bulgaria, with responsibilities for Bulgaria and Macedonia. Prior to joining Kamenitza, he was senior marketing manager at Wrigley Russia, where he was in charge of brand expansion into Ukraine, Belarus, Central Asia and the Caucasus. Lyubenov has a bachelor's degree in international business administration from the University of Lincoln, UK.
Beiersdorf
Bedros Kalfayan, general manager of skin care and cosmetics company Beiersdorf Bulgaria, will oversee the parent's company units in Romania and Moldova starting April 1. Following company restructuring, Beiersdorf's subsidiaries in the three countries were merged and are now one unit, part of Beiersdorf Central and Eastern Europe. Kalfayan joined Beiersdorf in 2007 as sales manager and was promoted to general manager in 2008. Prior to that, he worked for Axxon Bulgaria, Ferrero and Rubella. Kalfayan has a master's degree in industrial management from the Technical University in Sofia.
Hewlett-Packard
Sasha Bezuhanova has been appointed Hewlett-Packard public sector director for emerging markets, where she will oversee HP public sector activities in 63 countries, including Bulgaria. Bezuhanova will also be in charge of HP's relations with the European Union. Bezuhanova has been HP's public sector director for Central and Eastern Europe since 2008; before that she was general manager of HP Bulgaria since 1998. Bezuhanova has a master's degree in electronics from the Technical University in Sofia and has completed a managment programme at INSEAD.
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This comment has been removed by the moderator because it contained foul, abusive or discriminating language
Yagodin told in fact that interest rates can go up.
Morgage rates now here are about 6.0-6.5%
Bank of America now has 4.5%.
His statement comes just a week after the ministry of finance issued nearly 1/2 bln BGN in public debt at an average price of 6.5% pa.
Of course, it has potential. It is literally a licence to print money as banks only have to have about 7% of the money as deposits for the loans they make.
"If one bothers to calculate the average interest rates on deposits and loans for businesses and households for the past two years, one will see that all this talk about unjustified high loan rates are groundless," he said.
Maybe so, but this is on the assumption you have deposits to match. And according to this article, only 6% have this potential.