The three Bulgarian banks owned by Italy’s UniCredit Group: Bulbank, HVB Biochim and Hebrosbank, will merge by April 27, UniCredit Group managers Levon Hampartzoumian, Peter Harold and Andreas Katsini announced on April 3.

The merger will be completed by the end of July 2007, while the juridical merger is to be completed by April 27. The move will create the largest financial institution in Bulgaria. It will have a market share of 25 per cent, and have seven to eight billion leva in assets.

UniCredit announced that all clients would get new IBAN numbers.

The three UniCredit banks posted a combined profit of 117.9 million leva for 2006, 25 per cent more than in 2005, Focus news agency said on April 4.

On April 3, Hebrosbank said in a media statement that from April 10 it would be changing, automatically and free of charge, the bank account numbers of its clients. Hebrosbank clients can get their new IBAN numbers at the bank’s offices and branches, as well as on the especially created IBAN generators at the UniCredit Group banks web-pages www.biochim.com, www.hebros.bg and www.bulbank.bg.

The check will be possible after the client submits his/hers current account number. The system automatically produces a new number, valid with effect from April 10.

After Hebrosbank changes to the new system, Bulbank and HVB Biochim will do the same.

Starting April 10, it will be obligatory for payment orders sent by clients and orders to Hebrosbank clients’ accounts payments to state the new IBAN and new BIC code of Hebrosbank: UNCRBGSF. The new BIC code is due to the fact that as of May 2 2007, Hebrosbank will be part of UniCredit Bulbank (UCB).

Hebrosbank said that through the merger, the banks will proceed to a new generation unified bank information system, which from mid-2007 will give the option to offer a wider choice of bank products and services, as well as services of better quality and effectiveness in a larger number of offices and new bank branches.

The new UCB IT system is the modernised FlexCube version, already in use by Hebrosbank. Detailed analysis had shown that this new system would respond to current market challenges and clients’ increasing requirements, the media statement said.

FlexCube was named Basic Banks’ Decision of the Year and Software of the Year by the Financial Times Group British magazine The Banker. It is a fully centralised and integrated bank system for retail, corporate and investment banking.

FlexCube was chosen by more than 230 leading financial institutions throughout the world in 2006. It is also the most often sold bank decision for several years in a row, according to UK’s Banking Systems (IBS). Risk management is done online in a real time.

The banks of the new UCB achieved excellent financial results in 2006, the three banks said after their annual meetings.

After deducting integration effects with HVB Biochim and Hebrosbank, Bulbank achieved growth of more than 25 per cent to nearly 117.9 million leva in net profits. HVB Biochim revenue has doubled since 2005, reaching 42.9 million leva at the end of 2006.

Net profit of Hebrosbank was 14.5 million leva and in general, the three banks reached significant improvement in the basic financial indexes.

Bulbank finished 2006 with revenue of 77.4 million leva. After deducting costs connected to the integration with HVB Bank Biochim and Hebrosbank, Bulbank’s net profit was 117.9 million leva, representing considerable annual growth of more than 25 per cent.

The shareholders general assembly decided to share out as dividends about 68 per cent of the revenue, amounting to 52.6 million leva, which includes 592 000 leva non-distributed revenue from previous years. The rest will be re-invested: 353 million leva will be paid into the employees’ life insurance fund and 25 million leva will be kept as non-distributed revenue.

In recent years, Bulbank assets increased by 23 per cent to 4.2 billion leva (3.4 billion leva at the end of 2005).

HVB Bank Biochim 2006 revenue was twice that of its 2005 revenue. Shareholders decided to re-invest the whole revenue in the bank and pay it into the reserve fund. Shared assets reached nearly three billion leva, which represents 3.3 per cent growth compared to 2005. The assets structure remains stable, said HVB Bank Biochim, as the biggest share was for credits and advance payments to clients, which during the past two years were respectively 57.6 and 55.2 per cent.

Credits grew to 1.7 billion leva, an increase of 7.6 per cent. Clients’ deposits grew significantly, reaching 1.5 billion leva (16 per cent higher than 2005).

Hebrosbank 2006 revenue was 14.5 million leva. Shareholders decided that the revenue will be re-invested in the bank’s reserve fund.

Hebrosbank 2006 assets reached 922.2 million leva together, decreasing with 3.1 per cent compared to 2005. Net assets amount to 107.8 million leva, 15.2 per cent higher than the previous year.

Net credits for clients grew by 7.4 million leva compared to 2005 and amounted to 442.4 million leva at the end of 2006. Clients’ deposits also marked significant growth, increasing by 50 million leva and reaching 587.3 million leva at the end of 2006.

During 2006, all three banks from UniCredit Group gave special attention to activities connected to business social responsibility, a media statement said. Together with the UniCredit Group foundation Unidea, Bulbank made one of the biggest corporate campaigns for donations in Bulgaria. Hundreds of the bank’s employees supported one of the causes with amounts decided by them and further doubled by the bank and by Unidea. The main focus was support of orphanages.

As a member of United Nation’s (UN) Global Compact initiative, Bulbank supported one of the biggest Bulgarian projects “Turning society’s attention towards problems of people with mental disabilities”, together with the Ministry of Labour and Social Policy and with UK support.

Bulbank said that it had supported the project of celebrating Bulgaria’s EU membership by publishing a book on the country’s cultural heritage.

For fifth time, HVB Bank Biochim and Hebrosbank, together with Classic FM Radio, organised a series of concerts Classic Jam 2006-2007. The banks also sponsored the Foundation for Young Musical Talents, as well as concerts by young Bulgarian violinists in Slovenia.

In 2006, HVB Bank Biochim and Hebrosbank continued supporting children without parents in the SOS Kinderdorf Bulgaria and at other orphanages.

One of the first joint initiatives by Bulbank, HVB Bank Biochim and Hebrosbank after the official announcement of the merger between HVB and UniCredit was support given to the municipal authorities for creating of safe and pleasant city in one of central Sofia’s parks.

Other projects including support for the Bulgarian Christmas national charity initiative, municipalities, building of Christian chapels by the military, as well as projects in the health care, culture and sport fields were supported by the UniCredit Group banks in 2006.

They also received number of awards in 2006: the Euromoney excellence award in July 2006 for best bank in Bulgaria, Finance New Europe’s award for best bank in Bulgaria in December 2006 and best capital bank in Bulgaria for 2006, most effective bank according to Bulgarian-language Pari daily, Global Custodian award for best trustee bank in Bulgaria in January 2006 and 2007, Global Investor award for best trustee bank in Bulgaria in Decmber 2006, Manager magazine’s award for Manager of the year 2006, Classic FM Radio and Makta gallery - Golden feather for contribution to Bulgarian culture, in May 2006.