“Let’s make EU membership work for business” was the guiding slogan of the Seventh Business Roundtable with the Government of Bulgaria, which took place on December 11 and 12 at the Sheraton Hotel.

During the conference, chief executive director and directors’ council member of Eurobank EFG Bulgaria AD Anthony Hassiotis gave an interview to The Sofia Echo on the topic of the development trends for Bulgaria’s economy and banking sector in 2008.

Questioned on which sectors of the Bulgarian economy needed more development and where the state and the private sector should direct Greenfield investments to, Hassiotis said that the local economy sectors that were booming right now were financial services, construction, real estate and tourism. “I think in the future there has to be a shift to something that will create more export oriented activity, something that is sustainable in longer term and for example some of the manufacturing will have to be developed. Technology is an area that traditionally the country has been very strong in and should continue to prosper and flourish,” Hassiotis said.

According to him, there has to be a shift at some point from some of these now blooming sectors to others that will create more employment and long-term productivity improvements.

“We [Postbank] are a universal bank and we do business in all sectors of the economy by providing finance but in the future I think there will be more need to invest money to finance infrastructure types of projects like roads, ports, waterways, things that will make the country more appealing to use of its strategic location and being a crossroads. So if you say that Bulgaria is an important location country, then make access through it or to it easy for anyone who wants to use it,” Hassiotis said.
On the question of whether Postbank supports public-private partnerships, or more likely private investments to develop infrastructure, Hassiotis said “not only but yes, some of these – of course”.

“We [Eurobank EFG] have great deal of experience in that sector [public-private partnerships] as well. Obviously our head office is in Greece and there we have been involved in many such big projects,” Hassiotis said.

Moreover, speaking about the consumer loans increase in recent years, he said that the growth of consumer loans is a fact. “It is something that is there, it is not going to stop and will continue because the overall debt of the private sector compared to  GDP [gross domestic product] is at very, very low levels for the country. So that trend will continue,” he said. According to Hassiotis, the more important issue currently is how well prepared are borrowers (private individuals) to handle this amount of debt. “This is the challenge that we are all facing, both the people who borrow and the people who lend the money, to make sure that there is appropriate education for the people to handle their own debt,” he said.

Asked what are the strengths of Eurobank EFG in comparison to other foreign financial institutions that already have or are planning to enter the Bulgarian banking market, Hassiotis told The Sofia Echo that right now those who are interested in entering the market had already done so. “Already, as we said, about 95 per cent of the banking industry in Bulgaria is in the hands of foreign-owned institutions,” he said.

According to him, this fact itself demonstrates that all players on the market have learned to compete, and to work with each other.

“I feel very confident that Eurobank EFG, Postbank as well, is able to compete head-on with these foreign institutions. I think the fact that we have been gaining market share all this time indicates that we are doing something, number one: well, and number two: even better sometimes than the competition, so that the people and the companies (the corporate sector) of this country prefer us,” Hassiotis said.

He said that he was not sure whether there would be any major new companies coming into the country in the future as the ones that were interested had already entered the market and the market itself was relatively small. “The opportunities for the big players you mentioned, the big American banks, there are chances they would buy probably one of the players that has a presence in Bulgaria rather than come in Bulgaria by themselves. If Citibank wants to come in, for example, in Bulgaria or in retail (that we are talking about because, for example, some of these have a corporate presence), they would probably buy one of the banks that has a presence in the Balkans rather than try to set up business de novo in some of these countries,” Hassiotis said.

Postbank already has real estate company EFG Properties operating in the Bulgarian real estate sector and the bank has several funds that are part of the group and that invest in the country.

“We are not agents. We do appraisals to the extent that some investors address their inquires to us, they want us to find something for them. Perhaps some of our advantages are that we already know who is in real estate in this country and who has what for sale because we also finance them or we view them from the corporate side of bank,” Hassiotis said.

He said that Postbank and Eurobank EFG had no plans for major acquisitions and big mergers in 2008 because “that would imply that our company is merging with, let’s say, another company here in Bulgaria”. Hassiotis said they hd no such plans “unless the mother company [Eurobank EFG] merges”.

Hassiotis said the financial institution would continue using the name Postbank in 2008 until it feels “comfortable and ready to introduce the name Eurobank EFG”.