MUTUAL FUNDS
The total value of assets managed by mutual funds listed on the Bulgarian Stock Exchange (BSE) dropped by 7.2 per cent compared to a month earlier to 461.2 million euro as of the end of November. This was the first decrease since the end of 2005. The reason is believed to be the downward corrections in the prices of equities traded on the BSE. The asset value accounts for 1.64 per cent of the projected full-year GDP against 1.8 per cent a month earlier. The total amount of savings allocated to both local and foreign mutual funds is estimated at 588 million euro in November compared with 634 million euro a month earlier. Investments in foreign mutual funds were also affected by adverse stock price movements. If both local and foreign stock price indices recovered in December that would resume the growth rate in the stock of local assets allocated to mutual funds.

BANKS’ PROFITS
The aggregated net profit of the 30 commercial banks active in Bulgaria rose by 59.5 per cent to 964 million leva in January-October, data from Bulgarian National Bank showed. The total value of assets increased by 35.3 per cent to 53.2 billion leva by the end of October. The figure accounts for 97 per cent of the projected full-year GDP and is likely to exceed the 100 per cent benchmark by the end of the year. The stock of loans to the non-government sector increased at a faster rate of 58.6 per cent, according to the monetary survey of the central bank released earlier. As a result, the share of loans reached 75.8 per cent of all assets, indicating a steady expansion in the retail segment. The central bank release said that the liquidity and credit quality indicators did not raise concerns about the stability of the banking sector.

RAIFFEISEN LEASING
The European Bank for Reconstruction and Development (EBRD) extended a 10 million euro credit line to Raiffeisen Leasing Bulgaria for on-lending to small and medium-sized enterprises (SMEs). The firms will use the funds to buy equipment, vehicles and properties. The credit facility comes with a guarantee scheme approved by the European Commission. This is the second credit line the EBRD has given to Raiffeisen Leasing. In 2006 it lent the leasing firm 10 million euro to back SMEs.

STUDENT LOANS
Students with excellent records will be granted a grace period on the repayment of their student loans of two years after their graduation, Education Minister Daniel Vulchev said. The state will guarantee the loans and pay interest rates during the grace period. Banks will grant the loans, which the ministry plans to cover with funds from European Union programmes. According to the ministry, a number of banks have agreed to join the effort in providing the best performing students preferential loan conditions. Bulgaria will soften the terms of student loans for the socially disadvantaged in the 2008/2009 academic year as well. This will apply only to students who enrol in state universities.