A decision to share out the liquidation quota between the shareholders at the amount of BGN 0.62 per share was taken at the Annual General Meting of the shareholders of Bules JSC - Bourgas. In 1997 Bules JSC - Bourgas was privatized from the Austrian "Kronoshpan" and for 51 per cent of the company the Austrians paid USD 3.2 mln. Afterwards the International Finance Corporation financed the major owner of Bules JSC - Bourgas with USD 23.6 mln to extend the capacity. The sum was part of an investment project for USD 56 mln. The economic activity was taken by "Kronoshpan - Bulgaria", and Bules JSC started liquidation procedure. The company was decapitalized from the accumulated loss mainly because of luck of raw materials.
Source: Dnevnik (05.01.2006)

If having any spare money, Bulgarians keep it in bank deposits. In 2005 about 58% of finances in Bulgaria were bank deposited. About 28% of the wealth is kept cash. Only 4% of the Bulgarians' money is invested in securities that is about BGN 800 million (EUR 410 million). Over a billion levs is put into pension funds and only 160 million in mutual funds. Savings in the latter two instruments will increase most dynamically in the next years, according to UniCredit, due to the low indices for the time being.
Source: Standart (09.01.2006)

The financial assets of Bulgarian households will reach BGN 29.983 bln in 2008, UniCredit Group and Pioneer Investments’ forecast, based on New Europe’s households research. For 2005, financial assets of Bulgarians topped BGN 19,658 bln. New Europe’s household fortune will rise by 13 per cent annually, the figures also show. It is expected the share of pension and mutual funds to increase. In the next 3–4 years however, cash and bank deposits are to preserve their dominant share, despite their shrink in the general finance affluence.
Source: Pari (09.01.2006)

For a second year in a row the Bulgarian HVB Bank Biochim was top rated, according to Global Custodian’s edition research for best custodian bank in developing markets for 2005, HVB anounced yesterday. In this year rating, for first time a Bulgarian bank receives the prize, which is given to banks with a final estimation over the world average indexes. The rank is organized every year by Global Custodian through researches among local and international clients.
Source: Monitor (10.01.2006)

Bulbank changed commercial deposits interest rates in BGN and foreign currency, starting the beginning of the month. The new interest rate policy of the bank was initiated in November 2005, only for deposits in foreign currency. The bank determined the interest rates on individual deposits in BGN, EUR and USD, depending on deposit’s size and terms. The higher size of the deposit, the higher interest rate.
Source: Pari (11.01.2006)

Through the European Economics and Financial Centre (EEFC) HVB Bank Biochim JSC - Sofia and Hebrosbank JSC - Plovdiv will grant bridge credits for small and medium companies for projects between EUR 250 000 and EUR 750 000. The loans will be financed according to the scheme for free aid of the Holland Government PSOM - Programme for Cooperation with Emerging Markets. The projects approved by the programme of the Holland Government get 100 per cent free financial aid but only after showing the results they declared to accomplish. The budget of the scheme for free aid from the Holland Government to Eastern Europe for 2006 is EUR 10 mln.
Source: Monitor (12.01.2006)

Banks majority- or wholly-owned by Bulgarian shareholders are the sector's weakest profit-makers, shows end-September data of the Bulgarian central bank. While some locally-owned banks like Corporate Bank, DZI Bank, Encouragement Bank, Municipal Bank and Investbank are struggling to match the performance of the foreign-owned market leaders, others are doing decent business. Unionbank, for instance, posted a return on assets of 2.45%, on par with domestic heavyweights DSK and Bulbank. At the same time, DZI Bank and Investbank returned 0.5%. The average return of the Bulgarian-owned banks was measured at 0.78% by end-September. The underperformance is attributed mainly to less efficient management and lack of foreign know-how. Several takeovers of local banks are expected to be completed in 2006, reducing the sector assets controlled by Bulgarian-owned banks from the current 23.5% (7 bln levs). Greek-owned banks held 20% of the banking market in terms of assets at end-September, returning 1.75% on average. Austrians own another 20% of the sector's assets with Raiffeisenbank (Bulgaria) EAD and sister banks HVB Bank Biochim and Hebros Bank alone managing 5.7 bln levs. The banks in this group returned 1.12%. In Raiffeisenbank's case, this was due to the cost of expanding its branch network in 2005 while in the case of HVB Bank Biochim and Hebros Bank, the unimpressive return was due to integration costs. The market share in terms of assets of Italian-owned Bulbank is 11.1% with return on assets of 2.5%. DSK Bank, owned by Hungarian peer OTP, reported a rate of return of 2.35%. Unionbank will soon be added to the group of Hungarian-owned Bulgarian banks. Hungary's Magyar Kulkereskedelmi bank, a subsidiary of Bayerische Landesbank, signed in December 2005 an agreement to buy a 60% stake in Unionbank.
Source: Dnevnik (16.01.2006)

DZI is the best local insurer, according to GFK-Bulgaria research, made among 1000 citizens from the whole country, over age of 15. 45,5 per cent from the questioned people pointed out DZI as best insurer, giving the company first place on this index. Allianz Bulgaria ranks second with 12,3 per cent, followed by Bulstrad with 3,4 per cent and Orel – 3 per cent of the voting. Vitosha insurance company ranks fifth with 2,3 per cent.
Source: Monitor (17.01.2006)

DSK Bank is the best local bank, according to a GFK-Bulgaria’s inquiry, made among 1000 people, occasionally chosen aged 15 and up. DZI was pointed to be the best insurer. The top banks according to the inquiry are DSK Bank, UBB, Bulbank, Bulgarian Post Bank, HVB Bank Biochim, and Hebros Bank. DSK Bank, headed by Ms. Violina Marinova, received the approval of 36.4 per cent of the interviewed. Then comes United Bulgarian Bank with 13.8 per cent, followed by Bulbank – 4.4 per cent. DZI was announced the best local insurer with 45.5 per cent of the votes, second ranked Allianz Bulgaria with 12.3 per cent, followed by Bulstrad – 3.4 per cent, and Orel – 3 per cent.
Source: Pari (17.01.2006)

UniCredit Clarima Banca, the Italian bank specialising in consumer loans, credit cards and payment services, has chosen Bulgaria as its first business destination outside of its native market. The bank is part of the UniCredit Group which includes also Bulgarian Banks HVB Bank Biochim and Hebros Bank (since November 2005) and Bulbank. Clarima's entry on the Bulgarian market is interpreted as a further push on UniCredit's part on the local retail segment. Bulbank is the nation's third biggest mortgage lender and together with Hebros Bank and HVB Bank Biochim has the no.2 spot on the retail niche behind DSK Bank. The idea is to offer direct consumer financing based on the Clarima model, said Bulbank chairman and CEO Levon Hampartzoumian. The operation is a pilot project that will later be replicated in Central and Eastern Europe, said the executive. Market insiders said Clarima is likely to start marketing its banking products here in March.
Source: Dnevnik (17.01.2006)

Bulgarian American Credit Bank (BACB), 99%-owned by the Bulgarian American Enterprise Fund (BAEF), will be listed on the Bulgarian stock exchange, it was decided at a general shareholders meeting held on Monday, January 16. The other banks traded on the local bourse are Economic and Investment Bank, Central Cooperative Bank and DZI Bank. The listing will likely involve secondary offering of a minority stake in the bank. The project will be advised by CA IBCorporate Finance and HVB Bank Biochim. BACB's share capital stood at 12.746 mln levs by end-September, shows data of the Bulgarian National Bank. BACB made no official comment regarding the operation. A 2004 agreement with a bank syndicate binds BAEF to retain 75% ownership in BACB for 2 more years which means the bank will be able to offer no more than 25% to the public before the end of September. BACB was ranked as the nation's 19th largest bank in terms of assets at end-September with 328 mln levs. The credit portfolio of the bank is worth 286 mln levs, including 190 mln levs loaned to commercial real estate and construction projects. The deposit base of the bank amounted to 71.5 mln levs or 22% of its balance sheet value. That figure is well below the sector average of 77%, indicating that the bank does not rely on deposits for its lending operations. The bank posted an end-September net profit of 14.7 mln levs and a sector-leading return on assets of 4.5%.
Source: Dnevnik (18.01.2006)

The active foreign mutual funds in Bulgaria reached a total number of 49, after Commission for Protection the Competition (CPC) approved the prospectuses of 8 additional overseas funds this week. They will be managed by the registered in Austria Raiffeisen Capital Management. The company is a leader in assets management sector in Europe. As to September 2005, it managed over EUR 32 bln. The 8 funds’ shares will be listed on our market after registration procedure finalizing, company’s representatives pointed out.
Source: Monitor (20.01.2006)

The Aquapolis water park in sea resort Golden Sands has been put up for sale with a price tag of 3 mln levs, said Silvia Alexandrova, executive director of company Golden Sands JSC which owns the facility. The new owner will also have to assume the debts that financed the Aquapolis project which brings the total price of the water park to 8,945,669 levs. Aquapolis is an odd fit for the development strategy of the company which will focus on hospitality and travel, said Alexandrova. The 41,676 wheel-chair accessible Aquapolis water park opened in 2003 at a cost of over 10 mln levs. The park was designed and outfitted by Spain's Action Park Multiforma Grupo.
Source: Dnevnik (28.01.2006)

Bulgaria's Postbank said it has increased its capital by 195.5 mln levs to 305 mln levs, following a decision of its general meeting of shareholders taken on January 6. The capital rise was registered with the Sofia city court on January 26. The increase was performed through the issue of 39,116, 600 shares with a par value of 5 levs. Postbank would not reveal the reasons for the capital hike which is its second over the past six months. The exercise has taken Postbank to the top of the banking sector in terms of capital size, replacing Bulbank. The latter's capital stood at 166 mln levs by end-September, central bank data shows. The capital total of Bulgaria's banks stood at 1.2 bln levs by end-2005. In March 2005, Postbank received an 8 mln euro loan for additional capital reserves which was later transformed into main capital. Several months later the bank increased its capital by a further 22 mln euro, up to 109.9 mln levs. After the raise, Postbank's main shareholder EFG Eurobank holds a 98,7% stake. The Bulgarian Telecommunications Company and Bulgarian Posts control less than 0.65% each.
Source: Dnevnik (03.02.2006)

Bulbank, Bulgaria’s second-largest bank by assets, said it created an investment banking division in early 2006 with the task of structuring, organising and placing corporate bonds. The bank with CEO Levon Hampartsumyan offers corporate clients raising of share capital through public offering of shares on the regulated market.
Source: Pari (06.02.2006)

DSK Bank achieved the biggest profit in Bulgaria for 2005, the income statements of the commercial banks in Bulgaria as of the end of 2005, published yesterday by the Bulgarian National Bank (BNB), show. The profit of DSK Bank is 122.5 million levs. The hitherto leader in profit terms, Bulbank, comes second with a profit of 94.5 million levs. United Bulgarian Bank (UBB) occupies 3rd place with a profit of 93.8 million levs. DSK Bank holds down its leading position in deposits preference. The deposits in DSK Bank amount to over 3.5 billion levs, while the deposits of Bulgarian nationals, companies and institutions in Bulbank come up to 2.6 billion levs. The 3rd place is occupied by HVB Bank Biochim with deposits of 2.2 billion levs, followed by UBB with 2.05 billion levs. DSK Bank is again the leader and in accrediting with a total of 2.99 billion levs of given credits, followed by the UBB - 2.38 billion levs, Bulbank with 1.6 billion levs and HVB Bank Biochim with 1.57 billion levs. DSK Bank still holds and the biggest share in the bank market - 14%, followed by Bulbank with 11%. The third and the forth place are occupied respectively by the UBB and Raiffeisenbank. The above information is published in the report of Standard & Poor’s rating agency, regarding the bank sector in Bulgaria, cited by Deutsche Welle. Bulgaria's accession to the structures of the EU will encourage the companies and the households in Bulgaria to seek still more bank products. The banks in Bulgaria are among the most dynamically developing in Eastern Europe. But compared to the EU bank standards, the bank sector in Bulgaria has very weak perspectives and potential, the report reads further. The total sum of the deposits in Bulgaria is 22 billion levs, while the average deposit per capita is 2,800 levs. The competition in the bank market is very tough, which is of good use for the clients as they are being offered still more attractive products. As a result of the restrictive measures imposed by the BNB against the aggressive growth of the bank market, the banks in Bulgaria seek long-term deposits. The ordinary deposit interest is 3% as it can reach 7% at a 2-year deposit. Despite the boom of credits, the bank sector in Bulgaria is stable and implements reliable schemes for risk valuation, Standard and Poor’s writes further.
Source: Standart (09.02.2006)

Bulgarian banks ended fiscal 2005 with shuffles among the top ten in terms of assets. HVB Bank Biochim, which occupied the number five spot in terms of total assets in November 2005, moved one spot up in the ranking to the number four position at the end of 2005, after the assets of the bank increased to BGN 2.823 billion. The total assets of the bank registered 44.3% growth at the and of 2005, compared to 2004. Societe Generale Expressbank increased its assets to BGN 1.085 billion and ranked ninth at the end of 2005. A month earlier the bank occupied the number 10 spot. DSK Bank, which has the largest assets, topped the ranking in January 2005. The total assets of the bank reached 4.468 billion at the end of 2005, marking a 37.3% year on year increase. DSK Bank also leads the way in consumer lending with the largest portfolio of BGN 1.752 billion.
Source: Pari (10.02.2006)

Ten of Bulgaria's 34 banks generated 85% of the sector's record profit of 584 mln levs in 2005, shows data of the Bulgarian National Bank (BNB) released on Thursday, February 9. The Top 10 money-earners includes 9 of the biggest banks and the Bulgarian American Credit Bank which is grouped for statistical purposes by the BNB in the category of mid- and small-sized banks. The return on assets of the Bulgarian banking sector improved marginally over 2004. Last year, the banks returned 1.78 levs per 100 levs, slightly up from 1.74 levs in 2004. The Bulgarian banks returned on par with their peers in Croatia, Romania and Albania.
Source: Dnevnik (10.02.2006)

New giant bank will control assets for over 3 billion euro and will become the leader on the Bulgarian market. It was announced yesterday that the three banks – Bulbank, HVB Bank Biochim and Hebrosbank would merge into one. The name of the giant bank will be Bulbank and will be run by Levon Hampartzoumian, former CEO of Bulbank. Peter Harold, former CEO of Biochim and Hebrosbank, will become General Manager of the new bank. Andrea Casini, former Chief Operating Officer of Bulbank will be appointed Deputy General Manager. The new bank will have 326 offices and branches across Bulgaria and will serve over a million customers.
Source: Standart (23.02.2006)

New megabank will appear on the Bulgarian market in 2007 as a result of the merger of Bulbank, HVB Bank and Hebros Bank. The integration follows the merger of the three banks' owners, UniCredit and Bank Austria Creditanstalt. The procedure is planned to be finalised in the third quarter of 2007. The structure of the local integrated office will be built in the next few weeks. The office will plan and coordinate all merger-related activities. Until the process is completed, the three banks will operate in parallel. The merger between HVB Bank Biochim and Hebros Bank, which has already started, will finish in the second half of 2006. The acquisition of Hebros Bank by BA-CA and HVB Bank Biochim was finalised in March 2005. UniCredit and BA-CA have named the senior management of the new bank as the first step of the consolidation process. Levon Hampartsumyan, who currently heads Bulbank, will be chief executive officer and chairman of the management board. Peter Harold, management board chairman and chief executive director of HVB Bank Biochim and Hebros Bank, has been chosen as general manager of the megabank. Bulbank's chief operating officer Andrea Casini will become deputy general manager of the united credit institution. The merger of Bulbank, HVB Bank Biochim and Hebros Bank will result in the creation of Bulgaria's biggest bank. The total assets of the new institution will exceed EUR 3 billion. The bank will have 326 branches and offices countrywide, servicing more than 1 million customers. It will be part of the biggest bank network in Central and Eastern Europe.
Source: Pari (23.02.2006)

Italian insurer Generali will establish a holding company to manage its eastern European business, CEO Sergio Balbinot was quoted as saying by news agency APA on March 6, 2006. The new holding will be a spin-off of Generali Holding Vienna, which is currently responsible for the activities of the group in central and eastern Europe (CEE). Under the new strategic plan, Eastern Europe will be a priority growth region for the Italian insurer. Through the new holding Generali will try to become the strongest insurance group in Ukraine, Serbia, Russia and Bulgaria, Balbinot said. Generali expects a 20% annual growth in Eastern Europe by 2008.
Source: Dnevnik (09.03.2006)

Bulgarian American Credit Bank (BACB), 99%-owned by the Bulgarian American Enterprise Fund (BAEF), moved a step closer to a listing on the Bulgarian stock exchange Wed when the financial regulator approved the prospectus for the secondary offering of 12,624,725 shares. The other banks traded on the local bourse are Economic and Investment Bank, Central Co-operative Bank and DZI Bank. The project will be advised by CA IBCorporate Finance and HVB Bank Biochim. The next regulatory hurdle is the approval of the Bulgarian stock exchange. BACB reported a net profit of BGN 24 mln for 2005, up from BGN 14 mln a year ago. Assets rose to BGN 381 mln by end-December versus BGN 299 mln in late 2004. The credit portfolio of the bank totalled BGN 308 mln with deposits at BGN 84.5 mln. The bank has so far issued 4 mortgage and 3 corporate bonds.
Source: Dnevnik (09.03.2006)

MobilTel, Bulgaria's top wireless telecom carrier, and HVB Bank Biochim, part of HVB Group, have teamed up to offer co-branded credit cards. The credit limit on the MTel Visa Gold card is BGN 3,000 for holders of MTel Gold Club Card and BGN 1,500 for holders of MTel Silver Club Card with a 60-day interest-free period and annual interest of 12%. The credit limit on MTel Visa Classic ranges between BGN 500 and 5,000 and is set on a case-to-case basis. The interest-free period is 45 days with annual interest at 16.6%.
Source: Standart (10.03.2006)

Agreement, Gotze Delchev BT to discharge a liability with a total value of BGN 1 612 714.38 to Blagoevgrad BT JSC, was signed the two companies with Hebros Bank. Two weeks earlier, the companies made an agreement for discharge outstanding liabilities of Gotze Delchev BT.
Source: Pari (22.03.2006)

Postbank, majority owned by EFG Eurobank Ergasias, said it is accepting applications for Visa credit cards. Visa Electron will be issued to applicants with a minimum monthly net income of 160 levs and will have a credit limit of up to 6,000 levs. Individuals with a minimum monthly net income of 300 levs are eligible for Visa Classic. The limit on that card is up to 10,000 levs. The annual interest rate on both cards is 17.9%. A couple of weeks ago, HVB Bank Biochim, part of HVB Group, and MobilTel, Bulgaria's biggest wireless telecom operator, debuted 2 co-branded credit cards, MTel Visa Gold and MTel Visa Classic. Eligibility is limited to the Golden and Silver members of the MTel Club. Data of the Visa credit company shows that the use of its credit cards in Bulgaria surged by 146% to 455,600 transactions in 2005. The value of goods and services paid with Visa cards issued in Bulgaria was up a hefty 107% to $47.4 mln. The number of the Visa cards in Bulgaria increased by 120% to 584,269 by end-December 2005.
Source: Dnevnik (23.03.2006)

Competition between Bulgaria's mortgage lenders remains intense with Raiffeisenbank, Bulbank and First Investment Bank (FIB) boosting their market presence at the expense of their rivals, central bank data shows. The market is dominated by DSK Bank, United Bulgarian Bank (UBB), Bulbank, HVB Bank Biochim (jointly with Hebros Bank), Raiffeisenbank, Postbank and FIB. The top 7 disbursed a total of 1.6 bln levs in mortgages in 2005 giving them a share of 81.5%, down from 88% in June 2004 and 85% a year later. Despite a redistribution of market share the 4 biggest creditors retained their rankings. DSK Bank lost 9 percentage points of its market-leading share in 18 months, to reach 29.3% at end-2005. At no.2 UBB has a market share of 18.2%, down by 1% in the fourth quarter of 2005. Bulbank ranks third with a market share of 11.8% by end-2005, up by 9.6% over the past 18 months, followed by Postbank with 9,5%, up from 8% by end-September. Between June and December 2005, FIB dropped to no. 5, its market share shrinking from 6.96 to 6.7%. HVB Biochim and Hebros Bank have a combined share of 4.5%. Raiffeisenbank pumped up its share to 3.94% by end-2005 versus 2.18% 18 months ago Allianz Bulgaria, DZI Bank, Piraeos and Economic Investment Bank have a combined market share of some 10%.
Source: Dnevnik (24.03.2006)

Bulbank and UniCredit Clarima signed a contract for the establishment of Clarima Bulgaria, company specialized in direct consumer financing. The company will offer to its clients financing at competitive prices and the dealers will have one more channel for sale on the installment plan. The procedure for taking a credit by Clarima will be faster and more simplified, the clients should only give and identity card. Clarima Bulgaria will be a model for development of the direct consumer financing of the united Bank (after the merge of Bulbank, HVB Bank Biochim and Hebrosbank).
Source: Monitor (27.03.2006)

The fourth mortgage bond issued by Postbank, majority owned by EFG Eurobank Ergasias, will be listed for secondary trading on the Bulgarian bourse from Monday, March 27. The BGN 30 mln paper, which matures in 2008, was placed in November 2005. Earlier this year, Postbank said it had increased its capital by BGN 195.5 mln to BGN 305 mln. The capital rise was registered with the Sofia City Court on January 26. The exercise has taken Postbank to the top of the banking sector in terms of capital size, replacing Bulbank.
Source: Dnevnik (27.03.2006)

Bulgarian telecom start-up SpectrumNet said revenues from voice services rose by 84% in 2005. The number of customers that opted to have their calls routed through the SpectrumNet network quadrupled over the review period. In addition to signing up major corporate clients includes Bulbank, the Central Depository, Deloitte Bulgaria, Bulgarian National Bank, Shell Bulgaria and Overgas, SpectrumNet successfully targeted household customers with its 01020 carrier pre-selection service which offers calls to Europe and the U.S. at just 0.15 levs/min. SpectrumNet is the only Bulgarian telecom that locks call duration after the first 30 sec and not after the first minute, said SpectrumNet sales and marketing director Ralitsa Kilian. The company posted a 14% increase in revenues from Internet connectivity. Overall revenues were up 30% year-on-year to 11.5 mln levs in 2005. Revenue growth for the previous 2 years was 20% and 11%, respectively.
Source: Dnevnik (30.03.2006)

HVB Bank Biochim will sign today an agreement with the European Investment Bank for credit line of EUR 30 mln for investment loans for small and medium companies and municipalities. The funds will be used for financing projects of companies corresponding to the definition of the EU for small and medium-sized enterprises or for financing companies with investment projects in the field of environment protection, infrastructure, energy efficiency, healthcare, education, etc.
Source: Sega (30.03.2006)

The mortgage credits, granted from the banks in Bulgaria, increased twice for the last 12 months, according to a report by Bulgarian National Bank (BNB) for the condition of the bank system in Bulgaria until the end of February. Compared to the second month of last year the mortgage credits increased by 95,1 per cent, now surpassing BGN 2 bln. At the end of 2005 the building loans were 27,3 per cent of the total indebtedness of the households in Bulgaria. It is the most dynamically increasing segment of the debt of Bulgarian people. The annual average growth last five years was 80 per cent. Despite this and the prevailing debts are the consumers credits. They represent 52,1 per cent of the total debt of the households.
Source: Monitor (03.04.2006)

“Smart” payment cards with chip instead of magnetic band enter the Bulgarian market. The first new generation bank card will be launched by Bulbank. However, first Transcard launched co-branded international credit card Transcard JCB. “The great advantage of the chip card is that it can’t be copied, which is the mass abuse with the current magnetic cards. In this sense the introduction of the new generation smart cards is important element in the fight with card drawing”, commented the director of the national card operator BORICA Mr. Aleksandar Matrozov. According to experts in contrast to the traditional cards, the chip ones have many additional applications. One is the dynamic password that could be changed at every use of the card. However only the cards of BORICA have this option.
Source: Monitor (05.04.2006)

The net assets managed by the domestic mutual funds increased by 18.7 mln levs in March, to 113.5 mln levs, shows data provided by the Financial Supervision Commission and the Bulgarian bourse. The main drivers of the upside were new-comers that managed to raise a total of 12.84 mln levs within a month . Raiffeisenbank's Bulgarian asset management company launched four mutual funds in March, which managed a total of 10.45 mln levs by the end of the month. The other new entrants were Standard Asset Management's two funds - one balanced and one high-yield, whose assets total 580,000 levs. BenchMark, DSK and Elana, also launched a fund each, bringing the total number of mutual funds operating in Bulgaria to 29. The bulk of big funds have seen their assets increase in March thanks to both higher yields and more shareholders. However, they are handsomely outpaced by the smaller funds, such as Sentinel Principal and the United Bulgarian Bank's Platinum Bonds and Platinum Shares funds. In March TBI Eurobond, whose assets swelled to 21,11 mln levs, replaced Advance Invest (with 21,7 mln levs in assets), as the biggest local mutual fund. Next in terms of assets come Elana Eurofund with 10.5 mln levs and Elana Balanced Eurofund with 8.68 mln levs. High-risk funds investing in exclusively in equities retained their popularity, accumulating a total of 43.8 mln levs, followed by low-risk funds investing mostly in debt instruments with 39.5 mln levs and balanced funds with 30.7 mln levs. The above statistics does not include the 4 foreign funds which, except for Pioneer, do not release data about their performance in Bulgaria.
Source: Dnevnik (05.04.2006)

he new megabank that will emerge in Bulgaria with the merger of Bulbank, HVB Bank Biochim and Hebrosbank will be called Bulbank. This was announced by Levon Hampartsumyan, chief executive officer of Bulbank. The merger follows the unification of the three banks' owners, UniCredit and Bank Austria Creditanstalt. The new financial institution will be the biggest bank in Bulgaria. Its total assets will exceed EUR 3 billion. The bank will have 326 branches and offices countrywide, servicing more than 1 million customers.
Source: Pari (06.04.2006)

Bank Austria Creditanstalt (BA-CA) has acquired on behalf of its clients a stake in Bulgarian American Credit Bank (BACB) exceeding 19%, the Central Depository reports in its weekly bulletin. A package of 3.75 mln shares representing 30% of the bank's capital was floated on the local bourse last week, making BACB the 4th publicly traded bank in this country alongside Economic and Investment Bank, Central Cooperative Bank and DZI Bank. The exercise was advised by CA IBCorporate Finance, an investment unit of BA-CA, and HVB Bank Biochim. After the share sale, Bulgarian American Enterprise Fund lowered its stake in BACB to 69.4%. The bulk of the offering was scooped up by institutional investors from Austria, Sweden, the U.S., Finland, Switzerland, Germany, Ireland, the UK and Estonia. BACB's stock changed hands at BGN 32-33 per share on Monday. According to end-2005 central bank data, BACB ranked 21st among local banks in terms of assets (BGN 381 mln) and 12th in terms of capital (BGN 77.7 mln). The credit portfolio of the bank totalled BGN 307 mln with deposits at BGN 85.4 mln. In late 2005, Bank Austria acted on behalf of its clients in the purchase of stakes in insurer DZI and DZI Bank. After the transactions, Bank Austria issued warrants on the Viennese stock exchange with the DZI and DZI Bank shares as the underlying instrument.
Source: Dnevnik (11.04.2006)

Bulgarian ice-cream maker Jimmy's Tuesday inaugurated its new plant in the town of Kostinbrod near Sofia. The 7 mln lev facility sprawls over 2,800 sq m and has a daily capacity of 15 tons. The project was implemented on a Bulbank loan and $1 mln provided by U.S. investment fund SEAF which holds a minority stake in the plant. The facility is majority-owned by Jimmy's owner, Roseli. The new plant will make it possible for Jimmy's to expand outside its chain of ice-cream parlours and reach the shelves of food retail stores. The company has already signed distribution contracts with the major petrol stations and some shopping chains. As of next year Jimmy's will be making ice-cream under the Aro brand of the Metro Cash&Carry hypermarkets. Jimmy's is eyeing the no.3 position on the local market, commercial director Lyubomir Getov said. According to statistics quoted by Jimmy's, annual ice-cream consumption in Bulgaria stands at 0.6 kg per capita, way below Europe's average. Jimmy's plans to open 4 more ice-cream parlours in Sofia, bringing their total number to 21. Over the longer term, the company plans to operate a total of 40 outlets by 2008, part of which will be outside Sofia.
Source: Dnevnik (13.04.2006)

Executive director of HVB Bank Biochim Maria Ilieva has been appointed managerial agent of sibling bank Hebros, said the press offices of the 2 banks which are owned by Bank Austria Creditanstalt. The 2 banks are undergoing an integration process that should be completed in the second half of '06.
Source: Dnevnik (19.04.2006)

The executive director of Bulgaria's HVB Bank Biochim, Maria Ilieva, will become procurator of Hebrosbank, the financial institution said. Following the successful finalisation of the acquisition of Hebrosbank by Bank Austria Creditanstalt and HVB Bank Biochim, the two Bulgarian banks are in a process of integration, which is due to be completed in the second half of 2006. As executive director of HVB Bank Biochim and Hebrosbank Maria Ilieva will be responsible for development of retail banking and services for small and micro enterprises. She is also in charge of private banking and the card business of the two institutions.
Source: Pari (19.04.2006)

At a press-conference held yesterday after the Annual General Meeting of the shareholders of Bulbank JSC, the bank’s Chairman of the Management Board and CEO Mr. Levon Hampartzoumian and the Chief Operating Officer Mr. Andrea Casini presented the main parameters of Bulbank’s activity for 2005. Bulbank’s net consolidated profit for 2005 amounts to BGN 96.1 mln, reporting a growth of 11.4 per cent compared to 2004 and forming 16 per cent of the profit of the entire bank system. The bank’s capital rose 6.2 percent to BGN 610 mln from BGN 574 mln at the end of 2004. The shareholders made a decision for distribution of BGN 65.5 mln as dividend, which makes BGN 0.394 a share. According to Mr. Hampartzoumian the restructure in HVB Bank Biochim and Hebrosbank, related to the oncoming unification with the UniCredit Group has already started. The name of the new bank is not clear yet but the unification will make the biggest bank institution in Bulgaria, having a 20 percent share in almost all financial and trade indicators and over 1.1 mln clients.
Source: Capital market (21.04.2006)

Each Bulbank shareholder will receive 0.394 levs per share after the bank said it has allocated 69% of last year's profit for dividend distribution.The bank posted a profit of 94.2 mln levs in 2005. The consolidated result is 96.1 mln levs after factoring in the profit of wholly-owned subsidiary company UniCredit Leasing Bulgaria. Although the 11.4% profit growth posted in 2005 was slower than the showing of the overall banking sector, Bulbank outperformed in terms of average efficiency indicators. Return on assets rose to 2.9% versus a sector-wide 2.05%. Return on capital was 16.3% versus 22% for the industry as a whole but Bulbank CEO Levon Hampartsumyan said that was due to the fact that the bank is overcapitalised. If the return is calculated on the law-prescribed capital, that figure will jump to 30%, said Hampartsumyan. The cost to income ratio fell to 39.3% versus a sector-wide 59%. The structure of the bank's assets is shifting in favour of commercial banking at the expense of investment banking. Bulbank's credit portfolio expanded by 22.4% to 1.7 bln levs in 2005. Nonperforming loans to total gross loans fell to 1.6% from 2.46% a year ago. The sector-wide average is 3.6%. Exposure to retail clients and small companies increased by 80.5% to 345 mln levs. Mortgage loans added 114% to 266 mln levs (13% of the market). Corporate credits are up 13.1% over 2004. The top priority for 2006 is Bulbank's integration with HVB Bank Biochim and Hebros Bank. All three are now part of UniCredit Group.
Source: Dnevnik (21.04.2006)

The receiver of the footware plant in the town of Dobrich is organising a closed-bid auction for the plant and the trademark Tuesday, April 25. Bidding for the production facilities of Bulgaria's once biggest shoemaker will start from BGN 5.910 million, in line with the updated assessment. The buyer has to pay the proposed price within five days. If the auction fails, a new procedure will be organised with a lower start price. Properties of the plant that remain to be sold include facilities in the villages of Orlyak and Zarnevo. A distraint has been imposed on the properties by the company's biggest creditor, HVB Bank Biochim.
Source: Monitor (25.04.2006)

From May 1 HVB Bank Biochim and Hebrosbank synchronized the tariffs for citizens and corporate clients. The two banks will publish mutual interest bulletin. The process of the merger of the two banks will be finished until October 2006. The synchronization will be followed by common products and services.
Source: Monitor (03.05.2006)

Ivaylo Grigorov is the new CEO of Raiffeisen Asset Management (Bulgaria). He will step into office at the beginning of June. For the last few years he has been managing Bulbank's financial markets activities. Raiffeisen Asset Management offers eight foreign and four local mutual funds and manages assets for BGN 15.1 million (EUR 7.72 million).
Source: Standart (25.05.2006)

The Pioneer funds have amassed 25 mln levs YTD, bringing their asset total to 73 mln levs, said Bulbank which markets the fund's shares in Bulgaria. Direct sales account for 56 mln levs of the asset total with 16 mln levs invested in the Avangard Deposit schemes. Bulgaria's mutual funds manage just over 140 mln levs in assets. Raiffeisen, SGAM and Capital Invest are the other foreign fund brands available in Bulgaria.
Source: Dnevnik (01.06.2006)

HVB Bank Biochim and Hebrosbank started 2006 with net profit of over BGN 35 mln at the end of first quarter. BGN 17,7 mln of it is the profit of HVB Bank Biochim and BGN 17,3 mln – the one of Hebrosbank. The two banks have created the first in Bulgaria European financial centre. It consults Bulgarian companies and municipalities for the financing and co-financing by EU programs. The merger of Bulbank, HVB Bank Biochim and Hebrosbank will create the biggest bank in Bulgaria with assets of over EUR 3 bln with 326 branches all over the country.
Source: Sega (07.06.2006)

The domestic leasing companies' outstanding net lease receivables reached 1.444 bln levs by end-March, up 15.8% over end-2005, said the Bulgarian National Bank (BNB). Recent legislative changes obliged the leasing companies to report their financial operating leasing contracts to the central bank on a quarterly basis. The leasing companies are leaning heavily on fresh cash provided by their overseas shareholders. In the cases of Hebros Leasing and Raiffeisen Leasing additional resources are also provided by the EBRD. Automobiles is the most frequently leased asset and account for over 32.2% of all leasing contracts at end-March, slightly down on end-2006. The auto leasing contracts in the portfolio of the leasing companies total 452 mln levs. In the first quarter alone, the companies leased new vehicles worth 49.1 mln levs. Outstanding net lease receivables under leasing contracts for trucks totalled 413.6 mln levs at end-March, up 17.6% over December 2005. Outstanding net lease receivables under machinery, plant and equipment contracts rose 88.8 mln levs to 390.1 mln levs at end-March. They account for 27.8% of all leasing contracts, said BNB. The outstanding net lease receivables under financial leasing contracts were reported at 97% of all leasing contracts. Over 80% of all leasing contracts cover a period of 1 to 5 years.
Source: Dnevnik (09.06.2006)

The first consolidation of leasing companies in Bulgaria is a fact after the merger between HVB Leasing and Hebros Leasing. The new company, dubbed HVB Hebros Leasing, will be part of the UniCredit Group and will manage a BGN 260 million portfolio. The company will employ a total of 150 in 10 offices across Bulgaria and will have a customer base of over 7,000. HVB Leasing and Hebros Leasing started co-operating as early as 2005. The integration of the operations of the two companies allows us to offer the entire range of leasing services to international and large-scale customers, as well as to small and medium-sized enterprises (SME) and individuals, Stanislav Tanishev, deputy CEO of the new company said. UniCredit Group will have two leasing companies after the merger as it already owns UniCredit Leasing, which operates as a separate entity. A new leasing company may also be formed in the near future through the merger of HVB Hebros Leasing and UniCredit Leasing, experts say.
Source: Monitor (13.06.2006)

Supreme prosecutors have purposefully delayed the progress of 24 legal proceedings for years, it transpired after an investigation ordered by the Prosecutor General The legal proceedings about privatization of DZU AD Stara Zagora - a member of VIDEOTON Group and one of the largest Contract Manufacturers in Bulgaria - mainly in the field of electromechanical assemblage, electronics manufacturing services and machining - BalkanBank, Hebros Bank and another twenty-one provatization deals have never been submitted in court through the fault of top-placed magistrates. This transpired after a checkup, initiated by Prosecutor General Boris Velchev. In 2000, the folder with the materials on the DZU case was negligently forgotten in a strongbox of Pavel Pavlov, former acting director of the investigation department of the Supreme Cassation Prosecution, who died a year later. Nobody can come up with a decent explanation as to why the materials were absolutely forgotten for six years. Angel Illiev, Head of the Organized Crime and Terrorism Department with the Supreme Cassation Prosecution, personally delayed the investigation on the claim files against Ivan Mironov, former director of BalknaBank - Plovdiv, who unlawfully provided a loan of one million US dollars to the private firm Corn. One of the most scandalous instances of purposeful delay of the investigation process involves a claim file, seized by Velchev's predecessor Nikola Filchev in person.
Source: Standart (13.06.2006)

Biochim and Hebros Bank, part of UniCredit Group, said Wed, June 14, they are now offering investment credits of up to BGN 0.2 mln to small and medium-sized enterprises with annual turnover of up to BGN 1.5 mln . The banks will loan-finance up to 80% of the eligible investment project. The interest rate is 9.3% on the euro equivalent of the borrowed amount.
Source: Dnevnik (15.06.2006)

HVB Bank Biochim and Hebrosbank offer investment loans of up to BGN 200,000 to small and medium enterprises (SMEs) with an annual turnover of BGN 1.5 million, the financial institutions said. Small business should comply with the European standards in order to be competitive, HVB Bank Biochim CEO and Hebrosbank procurator Maria Ilieva said. We will encourage business through these credits, Ilieva added. The interest rate on the loans stands at 9.3%, while the repayment period is set at 3 years. The bank finances up to 80% of the investment projects, while the companies provide at least 20% of the funding. The loans may be used for new construction, expansion and reconstruction, as well as for the purchase of machinery and production equipment. HVB Bank Biochim also extends loans of up to EUR 250,000 under an agreement with Germany's KfW.
Source: Pari (15.06.2006)

HVB Bank Biochim and Hebros Bank, part of UniCredit Group, are marketing a new product aimed at small and medium-sized enterprises. The Business Optimum package, which includes no-commission settlement account in the local currency, no-commission issuing of Visa Business Electron or MasterCard Business cards and automatic overdraft on the company settlement accounts, slashes by up to 50% the standards fees and commissions on services and products used by SMEs on a day-to-day basis. SMEs generate 80% of the nation's jobs, 54% of exports, 73% of import and 34% of GDP.
Source: Dnevnik (20.06.2006)

Bulgaria's HVB Bank Biochim will provide a BGN 800,000 ten-year credit to the municipality of Tervel, the financial institution said. The bank will use a combination of two international programmes: a credit line from the European Investment Bank (EIB) aimed at encouraging investment projects, and a guarantee agreement with the US Agency for International Development (USAID). The bulk of the funds will be used for improving the city's infrastructure. Municipalities are still conservative as concerns foreign financing. What HVB Bank Biochim provides through the international programmes of EIB and USAID is facilitated access to additional resource, Milena Trifonova of the bank said. The financing for the Tervel municipality is the second credit provided in Bulgaria under HVB Bank Biochim's guarantee agreement with USAID. The first loan amounted to BGN 2 million and was extended to the municipality of Montana two a month ago. Under EIB's programme, municipalities can apply for financing of investment projects worth up to EUR 5 million and for free grants of 2.5% of the project value.
Source: Pari (22.06.2006)

The city of Plovdiv has selected Bulgaria's Raiffeisenbank for a EUR 25 million bond loan. At the last stage of the negotiations we had to choose between three financial institutions, as ranked by the special commission: Raiffeisenbank, DSK Bank, and Bulbank, Plovdiv mayor Ivan Chomakov said. The difference between the first and the second candidate was just EUR 46,000. Plovdiv achieved the best borrowing terms of all Bulgarian cities that have taken such loans, Chomakov added. The bonds will yield a fixed interest coupon of 2.875% on an annual basis and 3.9% annual interest costs, the chairwoman of the commission, Stoyanka Bagryanova, said. Plovdiv will repay the loan for 15 years. It will enjoy a two-year grace period for bank fees and a four-year grace period for the loan principal. The total amount that the city will repay to Raiffeisenbank is EUR 33,899,920. The first tranche of the loan will amount to EUR 5.2 million and can be disbursed about July 30. Another EUR 3.4 million tranche can be absorbed by the end of 2006. The city will use the loan to start infrastructure repairs. The lending agreement has to be ready by the end of June and voted by the municipal council on July 13.
Source: Pari (27.06.2006)

Bulgaria's Central Co-operative Bank (CCB) said it will transfer its entire 2005 profit of BGN 6.38 mln to reserves. The CCB shareholders did not move against the year's dominant trend of banks opting to capitalise 2005's financial results to bolster their capital base. The CBB shareholders also decided to raise the bank's capital by BGN 24.2 mln to BGN 72.7 mln . The bulk of the proceeds will be used for consumer and mortgage lending; another 20% will be spend to enlarge the nation-wide office network In late 2005, CCB hiked its capital from BGN 32.34 mln to BGN 48.4 mln. The bank's assets totalled BGN 828.8 mln by end-March, according to data of the central bank, a figure the management has forecast will reach the 1 bln lev benchmark by the end of the year. CCB's credit portfolio was worth BGN 410 mln by end-March. The publicly trade CCB is majority owned by CCB Asset Management (67.38%). Insurance company Armeec is also among the bank's shareholders. Both companies are connected to foreign trade firm Chimimport.
Source: Dnevnik (03.07.2006)

Sofia department store Tzum has been sold by its owner, businessman Georgi Gergov, for 20 mln euro to local company Atlas Invest JSC, said the Bulgarian stock exchange on Tuesday, July 4. The decision to sell 138,089 Tzum shares, or 99.59% of the company, was taken in late June by the general shareholders meeting of Sunny Day, a company owned by the Gergov family. The Varna-based Sunny Day bought Tzum for EUR 30 mln in 2004 from Cyprus-registered Southwise Trading Ltd. The Tzum shareholders have also decided to distribute no dividend for 2005 and to transfer BGN 55,000 to the company reserves. Gergov said Tzum posted a 45% gain in earnings last year.
Source: Dnevnik (05.07.2006)

HVB Bank Biochim will loan BGN 20 mln to the Sofia municipality for the reconstruction of major boulevards in the city. The lender was picked on a competitive basis. Biochim bested the offers placed by Raiffeisenbank, Bulbank, DSK Bank, Hebros Bank and Citibank. The selection will have to be approved at the July 13 meeting of the Sofia municipal council.
Source: Dnevnik (06.07.2006)

Two of the Bulgarian banks won the "Bank of the Year" award for 2005. These are the State Savings Bank (DSB) and the United Bulgarian Bank (OBB). Both boast the best performance, according to the chart of "Pari" newspaper. The State Savings Bank also won the first award as a holder of the largest market share. The jury selected Bulbank and Allianz Bulgaria as the most effective and dynamically developing credit institutions in Bulgaria. The prize for the "Customer's Bank" went to the Post Bank, according to the poll conducted among employers.
Source: Standart (06.07.2006)

HVB Bank Biochim and Hebros Bank, part of UniCredit Group, are marketing a new investment credit program tailored to a Phare grant scheme aimed at improving the competitiveness of Bulgarian enterprises. EU's Phare program will grant financing to micro and small-sized manufacturers to achieve international standards related to the country's upcoming EU accession. Eligible projects will receive minimum EUR 10,000 and maximum EUR 50,000 . The grants will cover no more than 65% of the overall implementation costs. The remainder could be provided in the form of bank credits, own funds or a combination of the two. Biochim and Hebros Bank are offering to provide in full the co-financing expected from the grant recipient. The credits, payable in the local currency or in euro, will have a top maturity of 5 years.
Source: Dnevnik (10.07.2006)

HVB Bank Biochim starts to grant loans for students, studying abroad. The special credits can be used by the Bulgarian students, studying in all the countries from the EU, Switzerland, Norway, USA, Canada and Australia. The interest rate is below the one for standard consumers and mortgage credits, reported the bank. The loan may be granted in parts through the whole studying period. The credit is up to BGN 7 000 with one guarantee and without upper limit if it is mortgage.
Source: Sega (11.07.2006)

The core production assets of Bulgarian refinery Nova Plama will be sold in bulk at an international auction after the creditors of the bankrupt company took a decision to this end. The non-production assets will be sold separately. The proceeds from the disposal of the non-production assets will be used to settle outstanding payments to national power grid operator NEK. One of the first tasks of the appraiser appointed by the creditors will be to take stock of the warehoused finished products. The creditors estimate that the Pleven-based company has stockpiled at least 39 tons of store-ready motor oils. Nova Plama was adjudicated bankrupt on May 19 on a motion from its main creditors, Yorset Holding and DZI Bank. The bankruptcy ruling is under appeal before the Supreme Cassation Court.
Source: Dnevnik (12.07.2006)

Finance magazine Euromoney as declared HVB Bank Biochim, part of the UniCredit Group, the best bank in Bulgaria for '06. In Bulgaria, UniCredit Group also owns Bulbank and Hebros Bank. The Euromoney excellence awards are handed out in three categories: global, global emerging markets and regional. The most prestigious prize - Global Best Bank, was bagged by France's Societe Generale.
Source: Dnevnik (18.07.2006)

Bulgaria's First Investment Bank (FIBank) said it has started offering credits to small-sized companies that have won Phare grants to improve their competitiveness. The recipients of the Phare grants have to provide 35% in co-financing. FIBank is ready to loan credits with a minimum amount of EUR 10,000 and maximum amount of EUR 50,000 for a period of 7 years.
Source: Dnevnik (18.07.2006)

In addition to the offices of Bulbank, the shares of Pioneer Investment funds will also be available in Bulgaria through HVB Bank Biochim and Hebros Bank. All three lenders are part of the UniCredit Group. Their integration is expected to be completed in May-April '07. The consolidation of the local UniCredit units is expected to engage the group's local investment funds as well.
Source: Dnevnik (19.07.2006)

French lender Societe Generale said it will launch a new subsidiary specialised in consumer finance in Bulgaria. The subsidiary, to be called Credibul, will be the second consumer finance unit launched by a local lender after Bulbank's UniCredit Clarima. The company, launched with a capital of BGN 19.5 mln, plans to market loan programs through a nation-wide partnership network. Credibul will be managed by a team of 5, including 4 Frenchmen. Italy's UniCredit expects Bulgaria's retail banking market to grow 25.6% in 2006. Overdraft and mortgage will be the fastest growing products while consumer finance operations will continue to be spun off into the non-banking segment, said UniCredit.
Source: Dnevnik (20.07.2006)

HVB Bank Biochim has won a public procedure to procure a 3 mln lev credit to the city of Chepelare. The 7-year loan is secured with municipal non-tax revenues. The city will use the resource to improve road infrastructure, renovate the city center and park. Biochim was recently picked as lender by the Sofia municipality for a 20 mln lev credit facility.
Source: Dnevnik (26.07.2006)

Bulgaria's HVB Bank Biochim, part of UniCredit Group, will extend a BGN 3 million loan to Chepelare municipality. The bank was selected with a decision of the Chepelare municipal council. The loan has a 7.5-year repayment period with a 6-month grace period for the principal. HVB Bank Biochim will also extend a BGN 75,000 grant to Chepelare municipality as part of the deal.
Source: Pari (26.07.2006)

Three Bulgarian commercial banks - DSK Bank, United Bulgarian Bank (UBB) and HVB Bank Biochim, have disbursed 61% of the industry's total consumer loans, according to data for the first half of 2006 released by the Bulgarian National Bank (BNB). The upsurge in competition over the last couple of years is yet to produce a challenger to the top 3 which not only remains unchanged but is extending its lead. A raft of successful product launches has boosted the market shares of UBB and Biochim in comparison with end-June 2005. UBB has added 651.6 mln levs to its consumer loan portfolio for an end-June market share of 14.6% versus 13.4% a year ago. Biochim has pumped up its market share from 8% to 8.6% year-on-year by raising the caps on maturity and maximum loan amount. DSK Bank is the only member of the trifecta that is losing market ground. The bank, whose market share contracted from 45% to 38%, was just about the only local lender to increase the cost of consumer borrowings last year. SG Expressbank is the 4th biggest lender on the consumer loan segment with flat year-on-year market share. Raiffeisenbank (Bulgaria) EAD has managed to knock Postbank from the 5th spot after the latter seems to have shifted its focus towards mortgage market. The top 10, unchanged from June 2005, is rounded off by Hebros Bank, First Investment Bank, Bulbank and Central Co--operative Bank. The ten banks control 94% of the consumer loan market, up from 85% in June last year.
Source: Dnevnik (01.08.2006)

The 10 biggest money-makers among Bulgaria's commercial banks generated 85% of the sector's overall H1 profit of BGN 342 mln. The top 3 alone contributed 45% to the sector's overall profit. The 2 newcomers in the top 10 profit-makers in comparison with June 2005 are Hebros Bank and Economic and Investment Bank (EIBank). First Investment Bank and Unionbank flunk out while 3 other lenders drop by one or more positions versus H1 '05. DSK Bank is the top H1 performer with BGN 65 mln but its growth rate of 13% is slower than the sector-wide 23.2%. DSK Bank made a profit of BGN 1.29 per BGN 100 of assets versus BGN 2.47 for Raiffeisenbank (Bulgaria) EAD and BGN 1.49 for United Bulgarian Bank (UBB). DSK Bank reported a net interest income growth of 7.9% for the past 12 months. UBB reported a profit of BGN 51 mln to place second in H1. The bank's net interest income added 12.2%. The BGN 33 mln profit posted by Raiffeisenbank (Bulgaria) EAD was good enough for the third spot in H1. The net interest income of the bank jumped 63% year-on-year. H1 profit at HVB Bank Biochim rose 47% year-on-year to BGN 27.4 mln, the sector's fourth best performance. The top 10 is rounded off by SG Expressbank, EIBank, Hebos Bank, Bulbank, Postbank and Bulgarian American Credit Bank. Municipal Bank reported a 66% slump in profits to 1 mln levs. ProCredit Bank was another profit slider, down 42.5% on H1 '05. Emporiki Bank and Texim Bank were the only lenders to finish H1 in the red. Emporiki booked a loss of BGN 2.7 mln versus a loss of BGN 0.774 mln a year ago. Texim has managed to slightly narrow its loss to BGN 0.284 mln versus BGN 0.363 mln a year ago.
Source: Dnevnik (02.08.2006)

10 banks control over 90% of mortgage lending Mortgage lending is another segment of Bulgaria's banking system where most of the business is in the hands of a dozen players, according to the latest data released by the Bulgarian National Bank (BNB). The brawniest competitors control 92% of the BGN 2.58 bln mortgage loan total. Domestic mortgage lending rose by BGN 1 bln or 70% in the past 12 months. Although it has seen its market share narrowed from 34% a year ago to 28.8%, DSK Bank still tops the rankings ahead of United Bulgarian Bank and Bulbank. Similarly, UBB and Biochim also lost ground versus mid-2005. The top 3 owned 65% of the mortgage portfolio a year ago, a share that has dropped to 59%. The biggest gainer is Piraeus Bank which breaks into the top 10 at the no.8 spot. Bulbank, Postbank, Raiffeisenbank (Bulgaria) EAD, DZI and Allianz Bulgaria all posted a year-on-year increase in market share.
Source: Dnevnik (04.08.2006)

Acting as a lead manager and underwriter, Raiffeisenbank (Bulgaria) EAD has placed a BGN 33.75 mln corporate bond on behalf of the local Postbank. Bulbank, CB Allianz and Insurance and Reinsurance Company Allianz also acted as underwriters. The interest coupon of the 36-month paper is fixed at 4.55%. This is Postbank's 5th bond and second consecutive placement of corporate bonds.
Source: Dnevnik (08.08.2006)

A bank's popularity topped the selection criteria of Bulgarian bank customers in a survey conducted by market research company Market Test in early 2006. The company polled 840 urban users of bank services aged 18-65 with a monthly income of BGN 200 per family member. Over 14 per cent of respondents said the glossier and more pervasive a bank's image is, the superior its services are considered to be. This predilection favours established players with a broad-reaching office network like DSK Bank, United Bulgarian Bank and Bulbank, said the pollsters. 11.4 per cent of respondents rated as the most important criterion in choosing a bank its customer relations, the guidance it provides in choosing the best financial product and the good disposition of staffers. Smaller banks like Allianz Bulgaria, SG Expressbank and Economic and Investment Bank tested best against this criterion, said the pollsters. Customer relations and product quality is fast catching up with corporate image as the top business-getter, said the pollsters. 11.2 per cent of respondents rated charges and fees as most decisive in their choice of a bank.
Source: Dnevnik (18.08.2006)

Fitch Ratings was quoted as saying by news agency SeeNews late last week that it has upgraded Bulgarian Postbank's FC IDR and Short-term to 'BBB+' from 'BBB' and to 'F2' from 'F3', respectively. Individual 'C/D' and Support '2' are affirmed. The outlook on the IDR is changed to Positive from Stable, reflecting the Positive Outlook assigned to that of its parent. United Bulgarian Bank's FC IDR and Short-term were upgraded to 'BBB+' from 'BBB' and to 'F2' from 'F3', respectively. Outlook remains Stable. Individual 'C/D' and Support '2' are affirmed. Bulgarian Bulbank's support rating was upgraded to '1' from '2'.
Source: Dnevnik (21.08.2006)

Investment, turnover and specialised agricultural credits secured with warehouse receipts are offered by HVB Bank Biochim and Hebrosbank at the international agricultural exhibition in Dobrich (northeastern Bulgaria). The event was opened on Tuesday, August 29 and will continue until September 2. The exhibition is attended by farmers, grain traders, farming machine and equipment merchants, financial institutions etc. Visitors to HVB Bank Biochim and Hebrosbank's stand can learn about the possibilities for receiving investment credits worth up to BGN 200,000 for a period of seven years. The product is especially designed to support small and medium enterprises. The loans can be used for construction, reconstruction, expansion, purchase of machines and equipment etc.
Source: Sega (30.08.2006)

Postbank, majority-owned by EFG Eurobank Ergasis, and Bulbank, part of UniCredit Group, said they are launching factoring subsidiaries. The Postbank subsidiary will operate under the name E.F.G. Factors and will offer export, import and domestic factoring.
Source: Dnevnik (31.08.2006)

The assets in the custody of Bulgaria's mutual funds reached BGN 186.4 mln at end-August, adding BGN 17 mln over July, show Dnevnik estimates based on data of the Bulgarian stock exchange. Alfa Index Top 15 was the only native mutual fund to IPO shares in August. Raiffeisenbank (Bulgaria) Balanced Fund outperformed the rest of the segment in terms of share sales, boosting its assets to BGN 15 mln from just over BGN 10 mln at end-July. That fund now ranks as the no.3 player in terms of assets. The value of assets managed by one of the biggest funds - TBI Eurobond, fell under the BGN 20 mln mark in August to BGN 18.8 mln. After no new funds made their bow in July, the segment added one new player in August to 35. Another 37 foreign-owned mutual funds also operate in Bulgaria. Pioneer is the only one of the non-native funds that reports on its share sales performance. The fund managed USD 34.7 mln at end-June. A couple of new funds are poised to enter the market in the remainder of this year. Yug Market, Aurora Capital and Synergon Asset Management are all expected to set up mutual fund vehicles.
Source: Dnevnik (05.09.2006)

HVB Bank Biochim, part of the UniCredit Group, said it has cut by 2.3 per cent to 6.9 per cent the first-year interest rate on investment credits extended to SMEs under a joint program with Germany's Kreditanstalt fuer Wiederaufbau (KfW). The rate for the remainder of the repayment period is 9.26 per cent. The promotional rate will apply to all loans of up to EUR 50,000 disbursed before the end of Oct. The applicants for the KfW credits are required to provide 15 per cent of the overall project financing themselves.
Source: Dnevnik (12.09.2006)

Sofia Acropolis, the Bulgarian unit of Lithuania's AB Akropolis Vilnius, Thursday unveiled a proposal for the construction of a large mixed-use complex in Sofia. The EUR 500 mln price tag of the project has earned a First Class Certificate form InvestBulgaria, the local foreign investment promotion authority. The development proposed by Sofia Acropolis will occupy the disused site of the Balkancar Shesti Septemvri powered trucks maker in the capital's Krasno Selo residential district. A 50,000 sq m commercial center, 50,000 sq m of office and 100,000 sq m of residential premises will be completed during the first phase of the project at a total cost of EUR 227.32 mln. That stage of construction should get underway in the third quarter of 2006 and should be completed by 2009. The entertainment component of the project will comprise a year-around skating rink, 8 cinema theaters and a fitness center. The combined floor area of retail and entertainment space in the complex will be 97,000 sq m. According to the manager of Sofia Acropolis, the retail center in the complex will boast as tenants the likes of international apparel brands Zara and Miss Sixty. Sofia Acropolis plans to co-finance the project and is in talks to securing additional funding from ING Bank, Emporiki Bank, Postbank, HVB Bank Biochim and Piraeus Bank.
Source: Dnevnik (15.09.2006)

Some Bulgarians take business credits disguised as consumer loans, Konstantina Daneva, a financial analyst at Creditex, said. Between 10 and 15% are the customers who take loans as individuals but use the money for business purposes. The trend is prompted by the fact that the fees paid on individual credits are lower than on business loans. But the credit shop advises companies to take corporate loans because the interest payments are recognised as expenses: that reduces the profit and the tax due. According to Creditex's calculations, if a Bulgarian takes a ten-year loan as an individual but for business needs, he/she will pay BGN 38,000 more than for a corporate credit. At the same time that increases the risk for the lending institution.
Source: Monitor (19.09.2006)

Italian insurance group Generali will officially take over the management of local Orel-G Holding in about a month. Generali bought 2 months ago 50.99 per cent of the holding, a deal that gives it control over general insurance company Orel, life insurance company Orel Life, Bulgarian Health Insurance Company Zakrila and the Zakrila medical and dental care center . Orel-G Holding is also co-owned by Germany's Munich Re (29.67 per cent) and Bulbank (19.3 per cent). Sources close to the deal said the ultimate goal of the Italian group is to take 100 per cent control of the holding which owns 90 per cent of Orel Life, 94 per cent of Orel and 55 per cent of Zakrila. According to Generali managing director Sergio Balbinot, there will be no radical changes in the name of the companies because Orel enjoys very high brand recognition. However, the company name could be updated with the addition of 'Generali', said Balbinot. The Orel group posted a decline in premium income to BGN 54.8 mln in 2005 versus BGN 68.1 mln a year earlier.
Source: Dnevnik (20.09.2006)

Czech company CEZ purchased yesterday 37,841,582 compensatory instruments at 68% of the par value, which is almost the entire sum for the acquisition of the part of the Varna thermal power plant (TPP) that can be paid with non-cash payment instruments. CEZ has to pay the sum for the acquisition of the TPP within a few days, Bulgaria's Privatisation Agency (PA) data show. A total of 53,800 shares in the TPP may be paid with compensatory instruments. The price of the shares is originally set at EUR 359.63 but with the use of non-cash payment instruments only 68% of that price will be paid.
Source: Monitor (20.09.2006)

Maria Ilieva has been appointed the new chief executive officer (CEO) of Bulgaria's MKB Unionbank, it emerged after the general meeting of the bank. Ilieva recently received a certificate from the Bulgarian National Bank (BNB) verifying that she has professional experience in the banking sector and is qualified for this post. Ilieva served as member of the management board and executive director of HVB Bank Biochim, prior to joining the management team of MKB Unionbank.
Source: Pari (20.09.2006)

EFG Eurobank, Greece's third biggest lender, Friday announced the 157.8 mln euro acquisition of Bulgaria's DZI Bank. EFG Eurobank will pay 110 mln euro in cash and the remainder with 2 mln of its shares for 74.26% in DZI Bank. The deal price of 8.30 levs per share exceeds by 50% the levels at which DZI Bank was suspended from trading in the runup to the take-over. The price to net asset ratio is 5, an all-time high for the local banking industry. The Greek bank said the deal should get regulatory approval by the end of the year, clearing the way for the merger of DZI Bank and the local Postbank which it already controls. The expected merger will create the nation's 4th largest bank with assets of 3.3 bln levs and a market share of 9.2%. It is not yet clear if the Greek bank would enter the fray for insurance company DZI which is expected to be put up for sale soon. DZI Bank is currently Bulgaria's 11th biggest bank in terms of assets. The bank, which operates 131 branches with 1,300 staff, is most active in corporate and commercial banking and deposits. It also operates a stand-alone system for card payments. In addition to DZI and Postbank, 4 other banks operating in Bulgaria either have Greek owners or a registered units of Greek banks: United Bulgarian Bank, Piraeus Bank, Alpha Bank and Emporiki Bank. The combined market share of the 6 banks is around 25%. They business focus is exclusively on consumer and mortgage lending and card payments.
Source: Dnevnik (02.10.2006)

6 Bulgarian banks have received EIB financing to that combined amount of 180 mln euro. The biggest chunk - 100 mln euro, has gone the way of the local UniCredit Group banks, Biochim, Hebros and Bulbank. Biochim, which got three tranches totalling 70 mln euro, has already used the credit line to finance the local Montana and Tervel municipalities. First Investment Bank and Encouragement Bank each got 10 mln euro from EIB. EIB has also extended 30 mln euro in total to Raiffeisenbank (Bulgaria) EAD. The biggest local projects tapping EIB resources include the upgrade of the Plovdiv-Svilengrad railway, the Cumerio Med copper smelter and the Trakia motorway. Bulgaria stands to receive some 500 mln euro in loan-financing from EIB over the next 2 years.
Source: Dnevnik (03.10.2006)

Maritsa Iztok 3 Power Company Monday said it has successfully completed the refinancing of the Maritsa Iztok 3 TPP refurbishment project. The company has secured a loan of 450 mln euro with a door to door tenor of 17 years to cover all the planned investments for the ongoing rehabilitation of the Maritsa Iztok 3 thermal power plant (TPP). The French investment bank Societe Generale has arranged and underwritten the new loan. The loan is covered by an unconditional repayment guarantee provided by SACE, the Italian credit risk insurer. By entering into the loan agreement Maritsa Iztok 3 Power Company was able to lock in improved financing conditions, including an extended repayment period and significantly reduced interest cost. The new loan will be used to repay the company’s outstanding debt under the existing loan agreements and finance the ongoing refurbishment of the power plant. The new single loan will replace the company’s existing long term debt financing package which consisted of four different loan tranches by various multilateral institutions, international and local banks. Maritsa Iztok 3 Power Company will pass on part of the benefits of the new financing in the form of a tariff reduction to the power off-taker, NEK, in accordance with what is foreseen in the Power Purchase Agreement entered into in 2003 as a commitment by the project to share the benefit of a refinancing with NEK. Last week, the company said it had entered into a 22 mln euro contract with Bulgarian company Totema Engineering for the design, manufacturing and construction of a gypsum dewatering plant to remove water from the gypsum produced in the new FGD desulphurisation installations of the TPP. Maritsa Iztok 3 Power Company AD is jointly owned by Enel, the Italian power company 73% and NEK, the Bulgarian power grid operator (27%). The company operates a 840MW lignite fired power plant in the Stara Zagora region of Bulgaria.
Source: Dnevnik (03.10.2006)

United Bulgarian Bank (UBB) is the first bank in Bulgaria to be launching structured deposits. The product, Wall Street, combines the classic characteristics of deposits with investment opportunities. The offer will allow UBB's customers to invest on the international financial markets but have a guaranteed deposit principal. Thus Bulgarians will be able to invest money on foreign stock exchanges at a minimum risk. They will not need any special knowledge or skills and will not have to pay fees and commissions. Competition among banks is gradually shifting from interest rates to new products, UBB CEO Stilyan Vatev said. Similar structured deposits are offered by Bulbank, but they are linked to investments in Pioneer Investments' mutual funds. The minimum amount to open a Wall Street structured deposit is EUR/USD 1,000. Customers can choose among several versions with a term of three months to three years. The type of portfolio (dynamic, balanced and conservative) has to be chosen in advance. The product will be offered at all UBB's branches from October 16.
Source: Monitor (05.10.2006)

The bosses of two of Bulgaria's biggest banks, Bulbank and United Bulgarian Bank (UBB), Wednesday gave guidance on their likely financial performance in 2006. Both financial institutions will be aiming for a 30% profit increase this year. 'We expect that at the end [of the year] we will grow on comparable basis from 20 to 30% in the net profitability, without considering the integration, because you have to deduct the integration, but I am speaking about normalised profit,' Bulbank's chief operating officer, Andrea Casini, told news agency SeeNews in an interview, referring to the integration of Bulbank with HVB Biochim and Hebros Bank. Bulbank was 18.7 mln levs in the black by mid-2006, shows data of the Bulgarian National Bank. The bank's net profit rose 11.4% to 96.1 mln levs in 2005. UBB chief executive director Stilian Vatev has forecast a pretax profit of 150 mln levs, up 30% over 2005. Assets will increase by a third while the cost to income ratio is seen falling below 40%, said Vatev. The bank executive expects UBB to add a percentage point to its share of the loan market. UBB will open a total of 35 new branches in 2006 and another 40 in 2007. UBB will hold on to the no.3 spot on the local market in terms of assets, said Vatev, implying that the anticipated merger of Postbank and DZI Bank will not dislodge UBB.
Source: Dnevnik (05.10.2006)

Bulbank, Biochim and Hebros Bank, all part of UniCredit Group, will share one booth at the upcoming The 3 Keys construction and furniture exhibition. The move is seen as a lead-in to the launch of a joint mortgage program. The integration of the 3 banks is expected to be finished in the second half of '07, creating the nation's biggest bank.
Source: Dnevnik (09.10.2006)

The rehabilitation schedule for the first four units of coal fired thermal power station Maritsa Iztok 2 is disrupted by delays in the design and the drafting by the contractor Mitsui Energy Projects of working projects in breach of the local legislation, says a report by the power station's executive director Atanas Dimitrov. The power station is forced to allow the contractor to go ahead with the installation and assembly work without the adequate paperwork on the condition that the Japanese corporation will hand it over before the respective facility is commissioned. The retrofitting of the first 4 units with sulphur dioxide removal equipment is 5 months behind schedule while the modernisation of unit 2 is 2 months behind. Units 1 and 2 have been switched off for 14-month rehabilitation. The power station is in talks to delay the unit 3 stoppage for after the upcoming winter season. Unit 4 should be switched off in April 2007. The EUR 226 mln project has received EUR 191 mln from the Japan Bank for International Cooperation and EUR 35 mln from Bulbank. Another serious problem reported by the management of the power station is the delivery of equipment that is in poor condition or that lacks the necessary paperwork.
Source: Dnevnik (16.10.2006)

Germany's Deutsche Bank and HypoVereinsbank said they withdraw from financing programs for a risky construction of Bulgaria's second Nuclear Power Plant Belene. This happened after the banks were subjected to a tremendous pressure on the part of the German environmentalists, who threatened to organize nationwide protests. The banks' branches in seventy-five German towns and cities were bombarded with indignant letters. " The social pressure made the banks' management give up the financing of the NPP Belene project," environmentalists said. "We cannot talk of a withdrawal," explained Deutsche Bank spokesman Dr. Ronald Weichert. According to him, the bank has not withdrawn from the project, but has simply decided not to participate in it for economic reasons. Sources from the HVB Press Office said that their refusal to finance the Belene project was based on the banks economic policy. Although the banks yielded to the environmentalists' attacks, the Greens do not intend to call off the nationwide protests. "We insist on the full withdrawal of the banking sector from the financing of nuclear power projects," one of the environmentalists' leaders said.
Source: Standart (23.10.2006)

Bulgaria is poised to outperform Central and Eastern Europe in terms of foreign direct investment to GDP ratio, according to UniCredit Bank estimates announced at the Euromoney Finance and Investment Conference for Southeast Europe. The bank analysts have forecast Bulgaria's FDI to GDP ratio at 9.8 per cent for 2006 and 2007. Romania is seen in the runner-up spot with 6.5 per cent. Both states are due to joint the EU on January 1, 2007. The UniCredit economists have projected Bulgaria's 2006 year-end GDP growth at 5.7 per cent versus 7.2 per cent for Romania. According to UniCredit's New Europe Research Network, Bulgaria and Romania will record GDP growth of 6 per cent and 5.7 per cent in their freshman year as EU members.
Source: Dnevnik (25.10.2006)

All domestic lending restrictions will be removed from January 1, 2007, the Bulgarian National Bank (BNB) said on Thursday, October 26. BNB said it is rolling back the lending deterrants because they have achieved their goal regarding the stability of the banking sector. The decision was taken during the meeting with the visiting IMF team which wrapped its mission here on Thursday. The lending restrictions were adopted 2 years ago at IMF's insistence. The fund was worried that the gross credit growth was prodding the c/a deficit and imperilling the country's fiscal stability. The move to loosen further the lending rules was expected after the central bank began to phase them out in June this year by removing the lending caps installed to moderate credit growth. At the time, the decision untied some BGN 650 mln that the banks had remitted as minimum required reserves they are required to keep with the central bank. The total lift of the credit growth caps is expected to put another BGN 350 mln at the banks' disposal. The decision of the central bankers should delight the local lenders who have been advocating that the credit growth restrictions will dull their competitive edge when the country joins the EU on January 1. The central bank said that new restrictions could be put into place if annual credit growth exceeds 20 per cent. That threshold is unlikely to be overstepped because the local lenders have started to transfer chunks of their credit portfolios to their parent banks abroad. Credits worth over BGN 2 bln have gone that way so far in 2006, including BGN 1.2 bln in corporate loans.
Source: Dnevnik (27.10.2006)

UniCredit Bulbank will be the name of the superbank that will be created after the merger of the local Bulbank, Hebros Bank and HVB Bank Biochim, all part of the UniCredit Group, Bulbank CEO Levon Hamparsumyan said on Thursday, October 26. The new bank, with BGN 3.4 bln in assets, will replace DSK Bank as the nation's biggest lender. The integration of the 3 banks should be completed by the end of Q2 2007. The first joint product of the 3 lenders are the Pioneer Investment mutual funds. Previously, the funds were marketed only Bulbank. Their units will now be available at Biochim and Hebros branches as well. The Pioneer mutual funds manage assets worth EUR 42.88 mln in Bulgaria. Italy's UniCredit Bank has tipped the mutual funds as the fastest growing segment of Bulgaria's financial market over the next 2 years, followed by life insurance. Mutual fund assets accounted for 1 per cent of household wealth in Bulgaria last year, a share that is seen rising to 2.5 per cent in 2006 and to 7 per cent by 2009.
Source: Dnevnik (27.10.2006)

UniCredit Bulbank will be the new name of the bank, established after the merger of Bulbank, HVB Biochim and Hebros Bank, Levon Hampartsumyan, chairman of the management board and CEO of the financial institution, said. The merger of the three banks will become official in the end of 2007. The three banks will be presented on the market by a unified name and logo and their products will gradually start to be offered in all their existing offices. The commercial policy of Bulbank, HVB Biochim and Hebrosbank has already been synchronised, Andrea Kazini, chief business officer of the three banks, said. The first product available at the offices of UniCredit Bulbank are the funds managed by Pioneer Investments. This is one of the most important steps towards the unified commercial policy of the megabank, Kazini said. Pioneer Investments' funds were offered only at Bulbank's branch network so far. HVB Biochim and Hebros Bank offered only units in funds managed by Capital Invest so far. Capital Invest will be under the umbrella of Pioneer Investments after the merger. Thus, the volume of assets managed on a global scale will reach EUR 270 billion. Pioneer Investments holds a 27.7% market share in Bulgaria, while Capital Invest accounts for 0.4% of the market.
Source: Pari (27.10.2006)

Standard&Poor's Ratings Services has raised its long-term counterparty credit rating on Bulgaria-based Bulbank AD (Bulbank) to 'BBB+' from 'BBB'. At the same time, the 'A-2' short-term rating was affirmed. The outlook is stable. The rating action follows the foreign currency upgrade of the Republic of Bulgaria to 'BBB+/A-2' from 'BBB/A-3'. The foreign currency upgrade of Bulgaria reflects the continued reduction in the public debt burden; robust growth prospects; and impending EU entry. Membership of the EU will underpin further economic and institutional modernization, and pave the way for Eurozone membership, which is likely by 2011. 'The ratings on Bulbank factor in its strategic importance to its parent, Italy-based UniCredito Italiano SpA, its solid market position, strong capitalization, and stable funding base,' said Standard & Poor's credit analyst Annette Ess. These positive factors are somewhat offset by its operations in the banking system with still-high economic and industry risks, despite improvements; its developing commercial profile; and untested, although improving, asset quality. They are also offset by execution risks associated with the planned merger with HVB Bank Biochim (not rated) and Hebros Bank (not rated), as part of the consolidation of UniCredito Italiano SpA (UniCredito; A+/Stable/A-1) and Bayerische Hypo- und Vereinsbank AG (HVB; A/Stable/A-1). 'The stable outlook reflects the view that future supportive commercial initiatives launched with the support of UniCredito will reinforce Bulbank's franchise, financial performance, and credit quality,' added Ms. Ess. UniCredito is expected to provide ample managerial support during the time of the complex merger with Biochim and Hebros, and that Bulbank will benefit from the positive evolution of the Bulgarian operating environment and structural reforms. Further upward rating actions will depend on the evolution of the Bulgarian operating environment, and the overall resilience of the franchise to competition and a maturing economy, and that the enlarged Bulgarian operations will strengthen UniCredito's strategic aspirations in southeast Europe. Negative rating pressures, although not expected, could emerge if the integration timetable and the level of execution risk encountered during the merger have a negative impact beyond expectations. In addition, a weakening of the links between Bulbank and UniCredito, or a reduction in the expected support to be received from UniCredito, would trigger a negative rating action.
Source: Dnevnik (30.10.2006)

International rating agency Standard & Poor's upgraded the long-term rating of Bulgaria's Bulbank from BBB to BBB+. The A-2 short-term rating of the bank was affirmed. The outlook is stable. Bulbank along with HVB Bank Biochim and Hebrosbank is part of Italy's UniCredit Group. The ratings on Bulbank factor in its strategic importance to its parent, UniCredito Italiano, its solid market position, strong capitalisation, and stable funding base, according to Standard & Poor's credit analyst Annette Ess. The stable outlook reflects the view that future supportive commercial initiatives launched with the support of UniCredito will reinforce Bulbank's franchise, financial performance, and credit quality, Ess added.
Source: Pari (30.10.2006)

Moody's assigns Caa1 to Kremikovtzi AD bonds Moody's Investors Service said it has assigned Caa1 corporate family ratings to Kremikovtzi AD and Caa1 rating to its 7 year secured guaranteed bond issued at Bulgaria Steel Finance BV with stable outlook. This is the first time rating. Following its privatisation in 1999, Kremikovtzi AD ran into operational and financial difficulties, accumulated significant legacy liabilities and had liquidity problems. In 2005, Kremikovtzi was acquired by Global Steel Holding Limited group ('GSHL', not rated) that indirectly controls 71 per cent in the company, while Bulgarian Government retains its 25.3 per cent stake. The new controlling shareholder is implementing a turn-around program planned for 2006-2009 and raised a EUR 325 mln bond to fund the program and some of the accumulated liabilities. The low level of support reflects Moody's view of a very limited prospect of financial support that may be available to the bondholders in the event of distress, while the Government is expected to continue to back GSHL's restructuring effort at Kremikovtzi. The assessment of the level of dependency as low reflects Kremikovtzi's current focus on exports, as well as sufficient diversification of Bulgaria's revenues and a few direct financial linkages between the Government and company. At the current low level of support and dependency there is no rating uplift above the BCA. The BCA of 17 reflects the fundamental weakness of the business and the fact that Kremikovtzi's ability to service its obligations depends on the timely implementation and success of the turn-around program. The bond is issued by Bulgaria Steel Finance BV, an "orphan" SPV of the operating company, and benefits from unconditional irrevocable guarantee issued by Kremikovtzi AD. Stable outlook assigned to the rating reflects Moody's view that the new owner is committed to the restructuring. The rating agency notes, however, that there are some delays with implementation of the initial plan for 2006. The stable outlook also reflects the expectation that the Company will continue to improve its liquidity. Kremikovtzi AD is a single-site steel producer in Bulgaria. Kremikovtzi revenues in 2005 were EUR 438 mln and EBITDA was negative EUR 47 mln.
Source: Dnevnik (01.11.2006)

Most investment intermediaries in Bulgaria register an increase in the number of their clients. The 660 clients of investment intermediary Karoll sealed a total of 8,981 deals on the Bulgarian Stock Exchange (BSE) in October 2006. BenchMark Finance ranked second with 3,376 deals signed in October, while Elana Trading occupied the number three spot with 2,900 transactions. Yug Market and Capman sealed 2,472 and 1,934 deals, respectively. Bigger clients obviously prefer the security provided by the banks as EIBank lead the way in October in terms of volume with deals for BGN 192.552 million. Investment intermediary First Financial Brokerage House sealed deals for BGN 97.25 million. Karoll ranked third with transactions for BGN 51.84 million, which makes it the favourite of smaller investors. HVB Biochim occupied the number four spot with BGN 50.27 million, followed by Euro Finance with deals for BGN 42.1 million.
Source: Pari (06.11.2006)

Interest rates on term deposits have hardly budged over the last couple of months, shows data released by the Bulgarian National Bank (BNB). The rates on money deposited for a period of between 12 and 24 months have even ticked down 0.26 percentage points to 6.68 per cent. A fractional gain was recorded only in rates on money deposited for more than 24 months. The interest rate on euro accounts deposited for a period exceeding 2 years reached 5.82 per cent and is expected to continue on the up, said the central bank.
Source: Dnevnik (06.11.2006)

Biochim and Hebros Bank will be simultaneously ingested by Bulbank with the shareholders in the former two lenders receiving 73 mln shares in the new megabank which will be called UniCredit Bulbank. The official shareholder approval for the consolidation of the 3 banks will be secured at general meetings scheduled for Dec 18-20. The full integration process is expected to wind up by Q2 '07.
Source: Dnevnik (15.11.2006)

Bulbank, Biochim, DSK Bank, United Bulgarian Bank and Raiffeisenbank controlled half of the domestic banking market by end-September, shows data released by the Bulgarian National Bank (BNB). Once the integration of Bulbank, Biochim and Hebros Bank - all part of UniCredit Group, is completed in 2007, four lenders will have a roughly 55 per cent market share. Postbank and DZI Bank are also expected to be merged by their Greek owner. Most of the big lenders posted marginal declines in their market share primarily due to the sale transfer of credits abroad. The top 5 banks generated 60 per cent of sector's total profits of BGN 530 mln for the review period. Only 2 of the nation's 34 commercial banks ended the January-September period in the red. Tokuda Bank posted a loss of BGN 0.276 mln while Emporiki Bank reported a loss of BGN 0.181 mln. A recent UniCredit report forecasts that the collective profit of the Bulgarian banking system will reach BGN 846 mln in 2007 and BGN 915 mln in 2009.
Source: Dnevnik (17.11.2006)

Three of Bulgaria's 34 commercial banks - DSK Bank, United Bulgarian Bank and Bulbank, have disbursed 55% of the domestic consumer and mortgage credit total at end-September, shows data released by the Bulgarian National Bank. Bulbank just pipped for the third position Biochim and Postbank although the market share of all three was reported at 6.6% by the central bank. Bulbank's retail credit portfolio stood at 492 mln levs versus 491 mln levs for Biochim and 487 mln levs for Postbank. The integration of Biochim, Bulbank and Hebros Bank - all part of UniCredit Group, will also make the race for no.2 spot more interesting because the combined share of the three lenders is estimate at 16.4% versus 16.6% for UBB, the current runner-up. The top 5 is rounded off by First Investment Bank with a 5.4% market share (4.5% of the consumer and 6.8% of the mortgage segment) and SG Expressbank with 5% (7.7% of the consumer and 0.9% of the mortgage segment). The January-September numbers reported by the central bank still leave the market picture rather fuzzy. Some banks posted a decline in the credit total while others eked out marginal gains. The analysis of the market is distorted by the retail credits sold abroad which amount to some 800 mln levs.
Source: Dnevnik (21.11.2006)

With record for the three indexes ended the week Bulgarian Stock Exchange and the holdings went back to the old positions. SOFIX ended with 1165.54 points, with 7.7 per cent increase on week base, after Thursday and Friday when was at maximum base. With 1.25 per cent increase, BG40 reached 189.51 points in Friday and for the five sessions, the increase was of 3.03 per cent. Dnevnik 15 increased its price by less than 1 per cent to 134.47 points in Monday, and added 4.3 per cent on week base. The increase of SOFIX was again owed to DZI, together with Orgachim and Petrol. In BG40, the forgotten success of the holdings showed up again, after Doverie - United Holding JSC – Sofia, Varna A Holding (PF) JSC – Varna and Albena-Invest Holding JSC – Albena, raised their prices by 5.06 per cent, 5.96 per cent and 2.3 per cent with the usual volumes of trade. For a week, Doverie raised 6.78 per cent, Varna A Holding – by 13.07 per cent and Albena Invest by 4.33 per cent.
Source: Dnevnik (26.11.2006)

Only 27 per cent of Bulgarians aged over 15 own or use a bank card, shows a market survey released by Italy's UniCredit. Bank card use in Bulgaria is on par with Serbia and Romania but lags substantially the markets in Slovakia, Hungary and Poland where 40-50 per cent of the population are card users. The rankings are topped by Slovenia, the Czech Republic and Croatia where over 2/3 of the population use bank cards. The survey indicates the potential of the new EU members for a surge in terms of both card circulation and card transaction volume, said UniCredit.
Source: Dnevnik (28.11.2006)

Only 27% of Bulgarian population above the age of 15 uses bankcards as a payment means, a survey made by UniCredit shows. After joining to the European Union the number of bankcards issued in Bulgaria and the number of transactions realized is expected to grow. According to Levon Hampartsumyan, CEO of Bulbank, Bulgarian banks will have to offer a great variety of bankcard products and to guarantee customers’ personal information safety.
Source: Pari (28.11.2006)

Bulgaria to Introduce the Euro in 2010 Bulgaria will be ready to introduce the common European currency in 2010. Romania will do so a little bit later, the trimester report of UniCredit Group for Central and Eastern Europe reads. The growth of Bulgaria's economy of 6.6 per cent for the second trimester of 2006 is the highest level for Bulgaria during the transition period. The expectations are for inflation of slightly over 3 per cent in 2008, UniCredit Group experts point out.
Source: Standart (05.12.2006)

The M&A lull in Bulgaria's banking industry is in sharp contrast with the score of possible new entries on the local insurance market. Germany's Ergo Versicherungsgruppe AG Thursday announced it is eyeing an number of markets for expansion, including Bulgaria, Romania, Russia and the Ukraine. Ergo is part of the Munich Re Group which recently sold its 30 per cent stake in Bulgarian insurance company Orel. Ergo is reportedly interested only in companies with a place in the Top 10 of the respective market. French insurer Cardif, a BNP Paribas company, recently said it will launch general and life insurance operations in Bulgaria in 2007. Electric Insurance of Ireland has notified the Bulgarian financial regulator that it plans to sell here automotive, sickness and casualty coverage from January 1, 2007. Earlier this year, news agency Reuters reported that Greece's Alpha Bank had agreed to sell products created and underwritten by French insurance company Axa through its branches in Bulgaria. The deal was part of Axa's EUR 255 mln take-over of Alpha bank's insurance arm Alpha Insurance.
Source: Dnevnik (08.12.2006)

The local Huvepharma has sold 6 per cent of its stake in Peshtera-based drug maker Biovet to Swiss-registered Marygold Worldwide Developments, the Bulgarian stock exchange said Thu. Huvepharma, which previously held 80 per cent of Biovet, disposed of 407,003 shares at BGN 5.43 in a deal worth BGN 2.2 mln. Huvepharma is 81 per cent-owned by the local Napredak Holding.
Source: Dnevnik (15.12.2006)

Doverie-Brico, owner of the Mr Bricolage DIY chains in Bulgaria, Serbia and Macedonia floated EUR 18 million bond issue. The company will use some EUR 14 million to repay its investment loans extended by Societe Generale Expressbank. The remaining EUR 4 million will be invested in the opening of four new outlets throughout the country in 2007, Andrey Evtimov, executive director of Doverie-Brico, told the Pari daily. Societe Generale Expressbank, which is the lead manager of the private offering of the issue, has subscribed bonds for EUR 10 million. Institutional investors, such as HVB Bank Biochim, Bulbank, Allianz commercial bank, Elana investment intermediary have also shown expressed in the issue. A total of 18,000 regular bonds were offered, each with EUR 1,000 par value. The bonds have a seven-year tenure with a call option after the third year. Interest on the bonds stands at 7.5%, with coupon payments due semi-annually. The bond issue is expected to be traded on the Bulgarian Stock Exchange (BSE) as of March 2007, Evtimov said.
Source: Pari (19.12.2006)

The three Bulgarian banks HVB Bank Biochim, Hebros Bank and Bulbank will unite in one bank bearing the name of UniCredit Bulbank. The shareholders of the first two banks have already voted for the institutions to merge with Bulbank, whose owners will accept the unity. After the merger the main capital of the reformed bank UniCredit Bulbank will be increased by the issuance of 72,885,364 new shares. They will be distributed between the shareholders of the merging financial institutions Hebros Bank and HVB Bank Biochim. The new bank UniCredit Bulbank will have over 1.1 million clients. The asset value of the three banks is more than BGN 7 billion.
Source: mediapool.bg (20.12.2006)