Crisis spurs on savers Bulgarians have started to stash away more money as they are feeling the pinch of the economic turmoil, MKB Unionbank said. The lender estimated Bulgarians put an average of some BGN 10,000 in new deposits, building up at regular intervals with smaller amounts they have saved over the month. “The crisis has impacted on consumer spending, with citizens scaling back costs and boosting savings as they are more uncertain about the future,” said MKB Unionbank chief executive Maria Ilieva. The lender currently offers a promotional three-month deposits coming with a 9% annual interest rate for local currency and 7% for euro. Deposit interest rates in Bulgaria have been coming down since September 2009, cooling to 7.7% in November 2009 from 8.16% for January.
Source: Dnevnik (07.01.2010)

Bulgaria’s GDP to bounce back in 2011 – UniCredit Bulgaria will come back on the recovery road in 2011, when its economy should expand by 1.7%, Italy’s UniCredit, which owns local UniCredit Bulbank, said in a report on Central and Eastern Europe. The recovery will be completed in the second quarter of 2011, the economists predicted. In 2010, GDP will contract further but at a slacker pace of 1.5% from the previous forecast of 2.5%. Solving lingering macroeconomic misbalances will continue to dent growth of the Bulgarian economy this year. Tight consumer spending will fuel recession as debt levels outstrip most of the other CEE countries. Job losses will peak in 2010 as public sector restructuring continues. If structural reforms and economic recovery of Bulgaria’s main trade partners continues, economic activity in the country will gradually pick up in 2011 and there will be good news on the job front. Economic rebound will be propped up by stabilising real estate prices and resumed credit flow.
Source: Dnevnik (14.01.2010)

Ways mulled for putting order in RES sector There is complete chaos in the sector of renewable energy sources (RES). That opinion is voiced not only by ministers Traycho Traykov of energy and Nona Karadzhova of environment but by businesses, too. Projects for more than 12,000 mW are being prepared at present. The possibilities for access to European funding are one of the reasons for the boom in RES projects. The programme for rural development alone provides EUR 50 to 70 million for small photovoltaic installations, the chairman of the Bulgarian Photovoltaic Association, Nikola Gazdov, said. Moreover, investors' profits are guaranteed, because 16% of the electricity consumed in Bulgaria should come from renewable sources by 2020. At a meeting of ministers Traykov and Karadzhova with the Confederation of Employers and Industrialists in Bulgaria (CEIBG) on Wednesday all parties agreed that there is need for order in the sector. According to Karadzhova, applications for environmental impact assessment of new RES projects should stop to be accepted for six months until a national RES plan is adopted. The plan will specify the areas where no such projects will be developed, e.g. Natura 2000. If the projects are not suspended now, quite many companies may turn out to have invested in photovoltaic or wind parks they will be unable to complete and thus lose millions of euro, she explained. There are several ways for sifting out quality from speculative projects, according to CEIBG. For example, projects that have not received construction permit for one year should be cancelled. That should also be the fate of projects that do not have enough land. However, projects that have an environment impact assessment and a construction permit should not be restricted. A public register of RES should be promptly created at the State Energy and Water Regulatory Commission. Bulgaria will lose at least EUR 2 billion foreign investment from the suspension of new projects, Kancho Stoychev, owner of BlackSeaRama golf course, pointed out. He urged the environment ministry not to stop the development of green energy installations, because there is stiff competition for such projects in the region. Many RES projects will rely on 100% borrowed financing. About 60% of the investment in RES should be own funds, UniCredit Bulbank CEO Levon Hampartsumyan was adamant.
Source: Pari (14.01.2010)

Bulgarian lenders have moved from an all-out deposit war into deposit retreat, with eleven players shaving rates and three scrapping promotions in December. Meanwhile, the credit market ground to a complete standstill. Financial consultancy Moite Pari said in its monthly review that rates have been slashed in all three major currencies including the lev, euro and the US dollar. The list of financial institutions that have tweaked deposit offers features Bulgarian American Credit Bank, Raiffeisenbank, First Investment Bank (FIBank), Postbank, UniCredit Bulbank, United Bulgarian Bank (UBB), Societe Generale Expressbank, Emporiki Bank, Alpha Bank, Piraeus Bank and CIBank. Rates have been chopped off by between 0.25 and 1.55 percentage points, with return on three-month term deposits lapsing back into March 2009 levels. As the market searches for a direction, rates range between 4% and 8% annually across lenders.
Source: Dnevnik (14.01.2010)

The new candidate directors of the Bulgarian Stock Exchange (BSE) will manage to beat the incumbents at Wednesday's general meeting, vote calculations show. The ministry of finance, with 44% of the capital, holds the trump card. The big obstacle to the approval of the new board of directors is BSE's fragmented shareholder structure, with only a few investors holding more than 1%. Big investment intermediaries will back up the change, since that will give them strong representation on the board of directors: the chairman of the Bulgarian Association of Licensed Investment Intermediaries, Lyubomir Boyadzhiev, is nominated for a seat. Commercial banks will give their support in the vote, as they are offered to keep a key member, Asen Yagodin. Three banks are among the big shareholders in BSE. UniCredit Bulbank holds 119,800 shares, Central Cooperative Bank and First Investment bank have 80,000 shares each. Their total interest is a touch below 5% and, added to the votes of intermediaries, secures the crucial 51%. The likely election of new directors, however, will not be the end of changes at the BSE. The strong representation of investment intermediaries has made other market players seek place in BSE's management. The board should include representatives of the issuers, the management board chairman of the Bulgarian Industrial Capital Association, Vasil Velev, pointed out. The big institutional investors should also have their members, Bulgarian Association of Asset Management Companies chairman Stoyan Toshev said.
Source: Pari (20.01.2010)

Bulgarians continue to invest in real estate In defiance of the crisis Bulgarians have become wealthier and will strengthen their financial stability in the next years shows a survey commissioned by UniCredit on households' finances. The better financial situation of Bulgarian families in 2009 is due to two reasons: firstly, the Bulgarians spend less money as they don't know for certain what will happen to them tomorrow and they save money for rainy days. The other reason is that customers' liability to financial institutions decrease. The homes of the Bulgarians form the biggest share of their assets. Nearly 87% of the total affluence of Bulgarian households is in real estate, statistics shows. 84% of the remaining 13% are in bank deposits and in free money. And after that come investments in stock securities, insurances and pension funds. Not until 2014 Bulgarians would be wealthier than we were in 2007, before the economic crisis hit the world. It is expected that in 2014 Bulgarians will have accumulated BGN 20 billion. In the next years the well-being of the Bulgarian families will grow, but step-by-step, the prognosis of UniCredit shows.
Source: Novinar (22.01.2010)

Prosperity of Bulgarian Families Grows In defiance of the crisis Bulgarians have become wealthier and will strengthen their financial stability in the next years shows a survey commissioned by UniCredit on households' finances. The better financial situation of Bulgarian families in 2009 is due to two reasons: firstly, the Bulgarians spend less money as they don't know for certain what will happen to them tomorrow and they save money for rainy days. The other reason is that customers' liability to financial institutions decrease. The homes of the Bulgarians form the biggest share of their assets. Nearly 87% of the total affluence of Bulgarian households is in real estate, statistics shows. 84% of the remaining 13% are in bank deposits and in free money. And after that come investments in stock securities, insurances and pension funds. Not until 2014 Bulgarians would be wealthier than we were in 2007, before the economic crisis hit the world. It is expected that in 2014 Bulgarians will have accumulated 20 billion leva (1 euro = 1,95 leva). In the next years the well-being of the Bulgarian families will grow, but step-by-step, the prognosis of UniCredit shows.
Source: Standart (22.01.2010)

Crisis pummels 2009 profits of 22 Bulgarian banks Bulgaria’s banking sector rounded off 2009 at a profit but 22 out of the 33 market players have turned in a worse performance than a year earlier as the crisis rumbled on. Data by the Bulgarian National Bank (BNB) revealed that banks have suffered deterioration of between 8% and a staggering 79%, with West-East Bank plummeting almost 225% after it swung to a BGN 3.9 million loss from a profit of BGN 3.1 million for 2008. Six banks have pulled off better performance including Corporate Commercial Bank, ProCredit Bank, Citibank Sofia Branch, International Asset Bank, Teximbank, Bulgarian Development Bank and Central Cooperative Bank. Alpha Bank Sofia Branch and Emporiki Bank have seen profits stage precipitous drops from BGN 68.9 million to BGN 23.1 million, and from BGN 7.024 million to BGN 3.7 million, respectively. Banks’ write-down costs stood at BGN 1.040 billion in 2009, a whopping increase from BGN 330.5 million for the previous year as both firms and households scrambled to pay fat loans handed out when lending was all abuzz. Overdue loans are creeping up, with loans with delays of over 30 days hitting 13.64% of the total gross volume. Loans which are more than 90 days overdue speak for 6.42% of the combined portfolio. The banking system posted an unaudited profit of BGN 780 million for 2009 versus BGN 1.4 billion for 2008. Assets added up to BGN 70.9 billion, up 1.9% year-on-year.
Source: Dnevnik (01.02.2010)

Banks Collect BGN 820 M in Fees In 2009, Bulgarians paid to banks BGN 820 mln in fees and commissions, shows a statistic of the Bulgarian National Bank. In some cases the profits from fees and commissions are up to 20 times higher than the service costs of the bank. The income from interests amounts to BGN 5 billion.
Source: Standart (03.02.2010)

Bankers: A New Wave of Job Cuts Is Coming The three-month report of UniCredit Group on the development of the economies in eastern and southeastern Europe predicts a painful way-out from the global crisis for Bulgaria. The forecast for Bulgaria is still hesitant but there are certain factors that make the experts from the financial institution be more optimistic about Bulgaria’s economy than they were a couple of months ago, the Deutsche Welle commented. The unemployment rate in Bulgaria is expected to reach its peak in 2010, first of all due to the planned shrinking of the public sector. The high unemployment rates could turn to be a very steady trend. That’s why it is quite important that the model of the economic growth be changed, the UniCredit Group experts state and they recommend that the production resources be directed to the export sectors. The situation in the Eurozone has started stabilizing but still no signs of going out of the recession are seen in Bulgaria, the report reads further. The shrinking of the country’s GDP only for the 3rd trimester of 2009 was 5.4% though the industrial production registered a slight increase for the first time.
Source: Standart (05.02.2010)

State tries to circumvent banks in fee payments An electronic system for payments to the state administration will start working within two or three months, the ministry of finance said. It will be launched in cooperation with the National Revenue Agency. The new system will avoid payments via banks and the fees they charge. Two days ago the Active Consumers Association (ACA) sent an open letter to the government insisting on preserving the cash desks at the state institutions. The consumer should be offered a choice, Bogomil Nikolov, ACA's executive director, said. The association also protested against the lack of information, as a lot of people do not know that they can pay by stamp duties sold at the post offices. There are cases when the administration refuses to accept that kind of payment though it is guaranteed by the State Taxes Act. Bank fees for payments to the state range from BGN 3 to 5.
Source: Pari (23.02.2010)

Bulgaria’s deposit rates unanimously head south Jan 2010 Extending a trend that started last September, deposit interest rates in Bulgaria staged a new drop in January 2010, down by 0.94 percentage points for local currency and by 0.25 points for euro. Fueling hopes that the borrowing costs will finally follow suit, the average rate slipped to 7.20% on lev-denominated term deposits and to 6.05% on their single-currency counterparts. On a monthly basis, the rates fell by 0.30 and 0.02 points, respectively, according to the Bulgarian National Bank (BNB). Corporate deposits have also moved in the same direction, edging 0.16 points lower to 6.43% for levs and a deeper 1.13 points to 3.97% for euro. January saw the market’s eight most active lenders cut their deposit rates, said financial consultancy Moite Pari. Deposit rates shed between 0.25 and 1 points at UniCredit Bulbank, DSK Bank, First Investment Bank (FIBank), Allianz Bank Bulgaria, Raiffeisenbank, Piraeus Bank, CIBank, and Alpha Bank. However, loan rates are still holding their ground for both businesses and households. January’s rates are higher than for the same month of last year even though local-currency home loans have seen a decline.
Source: Dnevnik (26.02.2010)

Listing BEH companies to restore interest in capital market The year 2009 was very difficult for the capital market in Bulgaria, though it was better than expected for UniCredit Bulbank. We were the only one to carry out significant deals, i.e. Chimimport's capital increase with privileged shares and BG Agro's listing, which was the only IPO in 2009, the deputy head of corporate, investment and private banking at UniCredit Bulbank, Spas Vidarkinski, told the Pari daily in an interview. Both operations were successful but that could not help the market maintain acceptable liquidity levels. As a matter of fact, smaller markets are much more vulnerable to crises. Liquidity The main reason for the poor interest of investors is the low liquidity of the market as a whole. There are not more than 10 stocks that trade actively. Investors' concerns that they may have to sell out of a position in the short term discourages them from buying stock, even if they like a given company. The first thing that needs to be done to increase liquidity is listing new and big companies. The government's decision to list the Bulgarian Energy Holding (BEH) will catalyse the process. The companies in the holding are big enough and if larger stakes are offered, that will lure investors back to the market. Another important factor is listing bigger packages. The free-float of many companies in Bulgaria is very low. All holdings below 5% are considered free-float but many of the shareholders with less than 5% are not very active, which hampers the liquidity of the position. Some companies on the developed markets have 100% shares outstanding. Measures The new management of the Bulgarian Stock Exchange (BSE) have a limited set of tools to revive the market, as there are many outside factors. What they can do is work towards attracting issuers and investors. It is good that now Bulgarian companies can get listed on the Warsaw Stock Exchange, as that will improve the liquidity of the BSE, too. Double listing will give investors comfort in opening such positions. However, companies have to be big to meet the criteria of the Warsaw market. It is a fact that foreign investors are not very interested in the BSE at present, so getting listed in Warsaw is a way to reach those investors. Forecast Even the most optimistic projections about Bulgaria's GDP in 2010 are about zero. UniCredit forecasts a drop in GDP. Given all that we cannot expect many positive developments, Vidarkinski pointed out. In 2009 a lot of companies started considering getting public. However, the situation so far in 2010 does not suggest the time for that has come. I expect things to get moving in the second half of the year, he said. Therefore in the end the year may turn out not that bad.
Source: Pari (01.03.2010)

Galeria Stara Zagora will be opened in late March The shopping center Galeria Stara Zagora will open its doors in late March. The Polish company has entered into lease agreements with leading brands, such as group Inditex, which comes with the brands Zara, Bershka, Stradivarius and Pull & Bear. This is the first entry of the Spanish brands in the city. Contracts with Reserved, House, Cropptown, Deichmann, Cinema City and Mercator have been also signed. GTC is currently negotiating with several major brands. Total sales area of the mall in Stara Zagora is more than 25 000 sq m. The investment exceeds EUR 50 million. The project is funded by the European Bank for Reconstruction and Development and Unicredit Bank. Except in Stara Zagora, the company has already had projects in Bourgas and Varna, which are under construction. The building of the shopping mall in Rousse has not started yet.
Source: Dnevnik (04.03.2010)

Flotation on the Warsaw Stock Exchange is much cheaper than listing an issue on the Bulgarian Stock Exchange (BSE), Pari daily's calculations show. The results were a big surprise for professional investors, who voiced their dismay at the big fee differences. Pari's calculations concern only the fees to the exchanges and the depositories and do not include the additional prospectus and consultancy costs. The Bulgarian exchange operator charges 0.06% of the market value of a given issue for admission for trade on the official market of equities. To trade on Warsaw's main list market, a company has to pay 0.03% of the issue value. The fees charged by the two depositories are miles apart. Poland's National Depository for Securities has a fixed fee of BLN 20,000 (BGN 10,133) for opening a formal account. The Bulgarian Central Depository charges BGN 150 to 50,000, depending on the issue par value. Let us take the following example. A Bulgarian company with a BGN 40 million issue will have to pay BGN 7,900 to the Central Depository and BGN 24,000 to the BSE to get listed on the official market in Bulgaria. To be admitted to Warsaw's main list, the same company will have to pay BGN 12,000 to the exchange operator and BGN 10,133 to the depository. The total fee is BGN 20,113, i.e. 30% cheaper than flotation in Bulgaria. It is a huge fee difference, given that the institutions in Bulgaria and Poland are supposed to carry out identical activities, Elana Trading's Tsvetoslav Tsachev commented. According to institutional investors, the high rates in Bulgaria are an unpleasant surprise, as they are yet another obstacle to the development of the capital market. Unfortunately, the higher fees for registration of new issues confirm the theory that the Bulgarian operator hampers the listing of new companies on the Bulgarian Stock Exchange, brokers pointed out. So far two Bulgarian companies have expressed intentions to get listed on the Warsaw Stock Exchange: Sopharma and Intercapital Property Development REIT. We are aware that listing in Warsaw will not cost us much, the property fund told the Pari daily. At the same time flotation in Poland has many advantages for Bulgarian companies. It gives them the opportunity to raise financing on one more capital market. Liquidity in Poland is much higher than in Bulgaria and there are many foreign investors. In 2009 the Warsaw Stock Exchange emerged as Europe's leader with 38 initial public offerings with a total value of EUR 1.59 million. SWIFT tests start next week In the middle of February Bulgaria's UniCredit Bulbank signed a custodian service agreement with Poland's National Depository, clearing the way for Bulgarian companies to get listed in Warsaw. Once the Bulgarian Central Depository completes the necessary SWIFT tests, which are starting next week, a direct connection will be established between the two institutions.
Source: Pari (12.03.2010)

Enemona bought the building of Bulgarian Telecommunications Company (BTC) in Sofia's Slatina district for EUR 2.75 million, the construction company said. The purchase was financed with a loan from UniCredit Bulbank. The loan will be repaid with the rent BTC will pay for using premises with a total floorage of 976 sq. m. The remaining space in the building will be occupied by Enemona's headquarters and Sofia offices. The relocation will allow the company to save BGN 380,000 a year. Some of the rooms will be rented out but the possible return has not been calculated yet, Enemona said. In early February Ireland's West Incorporate bought BTC's Telephone Palace in Sofia for EUR 22.5 million. BTC has also sold buildings in Veliko Tarnovo and Plovdiv.
Source: Standart (15.03.2010)

Investors have shown interest into acquiring shares of the troubled cosmetics company Alen Mak. According to Daniela Petkova, Doverie Pension Fund CEO, one of Alen Mak’s bond holders, negotiations with possible buyers are already under way. Petkova refused to give away the names of the future investor companies. Not long ago the Plovdiv District Court refused to announce Alen Mak bankrupt and ordered the company to settle its debts. Corporate Commercial Bank and united Bulgarian Bank, trustees of bond emissions, demanded pre-term payment of the emissions. Another option for the debts to be settled is sell off of company property. Other bond holders include UniCredit Bulbank, UniCredit Leasing and SG Expressbank.
Source: Pari (13.04.2010)

Bulgaria to emerge from recession in 2010 – UniCredit The Bulgarian economy will gain the upper hand over the downturn and see real recovery in 2011, UniCredit Group forecast in its latest quarterly overview. Bulgaria will go back to growth rates close to its potential only at the end of 2011, according to the economists quoted by UniCredit Bulbank, the group’s local unit. GDP will shed 1% for 2010 and grow 2.2% in 2011. Bulgaria’s finance minister Simeon Djankov said there are reasons for an upward revision of the economic outlook to 1% growth for 2010. UniCredit analysts underscore that sustainable recovery involves much more than GDP rise and practically starts when businesses and banks have cleaned up their balance sheets and the economy starts to create jobs. Bulgaria’s recovery hinges on the level of stabilisation of the country’s trading partners, the appetite for risk in emerging European markets and, most particularly, the pace of implementing domestic reforms and the progress in European funding absorption. Bulgaria’s balance of payment figures show that recovery is already underway, backed by an upturn in exports and inventories, according to UniCredit. In the household sector, two conflicting factors are at play. On the one hand, low inflation allows preservation of real income, on the other hand, tight retail sales coupled with still low confidence indicators suggest that households are still not ready to loosen their belts. UniCredit pointed to the flagging housing market as the root of recession in Bulgaria. Average home prices have tumbled more than 30% from their peaks, according to the experts.
Source: Dnevnik (20.04.2010)

UniCredit Bulbank posted the highest profit for the first quarter (Q1) of 2010 - BGN 37, 9 million, the official statistics of the Bulgarian National Bank (BNB) shows, according to the Pari daily. Its financial result lost 35, 41% on an annual basis. United Bulgarian Bank (UBB) and DSK Bank follow with BGN 34, 7 million and BGN 32, 5 million respectively. Corporate Commercial Bank (Corpbank), Raiffeisenbank, Piraeus Bank, First Investment Bank (Fibank), Bulgarian American Credit Bank (BACB), Central Cooperative Bank (CCB) and Bulgarian Development Bank (BDB) are also among the top 10 banks in terms of revenues for Q1 of 2010. Three of the banks have registered a growth in profit on an annual basis – Corpbank (36, 1%), UBB (23, 8%) and BDB (1,6%). BACB has registered the highest loss in profit compared to the same period of 2009 – 48, 6%. UniCredit Bulbank occupies the first position in terms of assets as well. The financial institution's assåts amounted to BGN 11, 4 billion in the end of Q1, gaining 3, 4% on an annual basis. DSK Bank is second with assets of BGN 8, 6 billion, followed by UBB and Raiffeisenbank with BGN 7, 9 billion and BGN 6, 8 billion respectively. Raiffeisenbank’s assets increased 10% on an annual basis. UBB’s assets added 5,2% for the same period.
Source: Pari (03.05.2010)

Unicredit Bulbank JSC - Sofia has appointed Annual general meeting on 28.05.2010. Meeting agenda includes: adoption of the Annual Report for Year 2009.
Source: Registry Agency (19.05.2010)

Financial experts: Banks to lose up to BGN 5 bn from non-performing credits Banks will lose between BGN 3.6 – 5 bn from bad credits, Kristofor Pavlov, Chief Economist of UniCredit Bulbank said yesterday at the financial forum, entitled "The Sound of Money". According to him, the peak of non-performing loans will be this year when their levels will reach some 10-11%. Stoyan Alexandrov from D Commerce Bank, commented for Klassa that it would be difficult to calculate the exact amount, but he was adamant that banks in our country did not reveal the actual levels of unserviced credits. According to him, lenders are trying to reschedule and restructure loans or even reduce interest rates in order to avoid showing these levels. In his words, the development of the bank market from now on will depend on the fulfilment of the Government's measures. If the Cabinet continues to explain that a Greek scenario was likely to develop in Bulgaria, the process of capitals flowing out of the country, which had already begun, would intensify, the banker stated. During the forum, financial experts united around the opinion that interest rates in credits and deposits would continue to go down. The spread between the interest rates on credits and deposits is expected to decrease while Bulgaria's accession to the Eurozone approaches. However, the experts acknowledged that some 70-80% of banks' profits came from lending. According to Emil Angelov, Deputy Executive Director of Piraeus Bank Bulgaria, mortgage loans will be a hit on the market this year, as the interest rates on mortgage credits and real estate prices are at their levels from 2006. Bankers expect the upward trend in the mortgage crediting to be maintained this year, with the growth in mortgage loans reaching 12-15% at the end of 2011. In an interview for Klassa a few days ago, Executive Director of CIBank Peter Andronov forecast that the net increase in lending would remain a single-digit figure in 2010. According to the most recent report of UniCredit Bulbank, it will stand at 4%. Deposits will remain the better option for investment than mutual funds, bankers are adamant. Representatives of investment companies indirectly opposed them earlier yesterday, claiming that banks are unfair competitors. According to investment funds, by offering high interest rates on deposits banks do not create conditions for attraction of investors on the capital markets.
Source: Class (20.05.2010)

UniCredit Bulbank will distribute its profit as dividends to its shareholders. The decision was taken Friday at the regular annual general shareholders meeting. “This dividends distribution will in no way affect negatively the capital ratios, as the bank, supported by its main shareholder UniCredit Bank Austria, prepares an increase of its capital in the third quarter of 2010 with an amount, equal to the amount that is currently being distributed as dividend”, Emilia Palibachiyska, member of the Management Board of UniCredit Bulbank and CFO of the bank announced. Despite the difficult economic environment the profitability and efficiency of UniCredit Bulbank remained stable. The assets of UniCredit Bulbank reached BGN 11.5 billion, which is an increase of 4.6% compared to 2008. The deposits reached BGN 6.24 billion at the end of 2009. The total loan portfolio of the bank increased with 3.4% on an annual basis to BGN 7.775 billion. ROA and ROE were respectively 1.7% and 12.9%, the capital adequacy ratio is 16.7%. All three indicators are above the ratios for the banking sector in Bulgaria, an announcement of the bank states.
Source: Dnevnik (31.05.2010)

The largest bank in Bulgaria - UniCredit Bulbank - won the major awards at the eighth international Financial Expo 'Banks, Investments, Money'. They were bestowed on Monday evening in the Sofia capital. The CEO of the bank, Levon Hampartzoumian, received the first price awards and certificates in the categories "Best Bank in 2009", "Safest bank in Bulgaria", as well as "Financial institution with the largest volume of investments". CIBANK PLC and Eurobank EFG Bulgaria JSC won the grand prize for "Financial Products of the Year 2010". The Pension Assurance Company 'Doverie' was honoured for its pension insurance activity and for best insurer - Allianz Bulgaria Holding. According to the survey conducted jointly with Scala Research Agency, the most popular vault in our country last year was DSK Bank. Together with the Bulgarian Investment Agency (BIA), an award was given to Ambassador of the Netherlands to Bulgaria H.E. Karel van Kesteren in the category "The State - the largest investor in Bulgaria for 2009" and to Alstom Power Bulgaria SPLTD for the biggest foreign corporate investor.
Source: Class (09.06.2010)

For a second consecutive year, the bulk of Bulgarian businesses will withhold dividend payouts in a bid to cushion against economic insecurity and higher risk as the crisis rumbles on. Just three banks including Corporate Commercial Bank (Corpbank), UniCredit Bulbank and Raiffeisenbank and only eight of the 40 most liquid companies on the Bulgarian Stock Exchange (BSE) will distribute dividend from 2009 profits, according to proposals that will be voted at upcoming general shareholders’ meetings. As in 2009, almost all banks operating on the Bulgarian market will add profits to capital to create crisis reserves in line with a recommendation by the Bulgarian National Bank (BNB). Investors in UniCredit Bulbank and Raiffeisenbank will return the monies in the form of capital hike.
Source: Dnevnik (14.06.2010)

Credit interest rates at their lowest Credit interest rates have been following the downward trend of deposit profitability, the Pari daily informs. In the words of Levon Hampartzoumian, CEO of UniCredit Bulbank, interest rates are falling as Bulgaria is currently overcoming the crisis. The most significant reductions are registered with consumer credits and mortgage loans in EUR. The average interest on newly-issued consumer loans was 12.75% by the end of May, the latest statistics of the Bulgarian National Bank (BNB) shows. Consumer credits in EUR maintain their cost of 10.61%. According to Hampartzoumian, it was completely normal that consumer loans would remain the most expensive. In May, banks issued 0.5% less credits on a monthly basis. The total of new credits granted in May is BGN 841.8 million, or 7% less on an annual basis. According to Mr. Hampartzoumian, there were still very few good projects that were worth financing.
Source: Pari (28.06.2010)

UniCredit Group: Bulgaria is recovering from the crisis According to UniCredit's analysts, the SE European region will see an economic growth of 2.8 or 3.1 per cent, the main contributors being Turkey (5.6%), Russia (3.4%) and Slovakia (3.5%). Unfortunately, Bulgaria's economy is expected to slump by one per cent by the end of 2010. In other words, the countries in the region are recovering in two different gears, with the main risks coming from the Eurozone amid financial market tensions and state debt worries. The fact that Bulgaria's economy sank by just 3.6% y/y against 5.9% in the last quarter of 2009, lends itself to the stronger external demand. However, the steady increase in the export rate is not strong enough to guarantee a sustainable recovery of the Bulgarian economy.
Source: Standart (29.06.2010)

Depression Will Last Longer Levon Hampurtsumian, head of the Steering Committee of UniCredit Bulbank The depression following the economic crisis may very well last longer than we have expected. Bulgaria has lifted off the bottom of the crisis but has settled into an economic depression. This means oppressed consumption and oppressed investing ? things which accompany every crisis and every post-crisis times. The first signs of livening up come from the export-oriented industries. The slight drops in economic growth resulting from the increased prices of fuels and electricity could be compensated by a good agricultural produce in the autumn and a good tourism season. Unless, though, we get organized, stir the spirit of entrepreneurship and reduce the public expenses, the depression could take very long. This state is far from a psychological one, it is purely material. This depression, we are in, is the purgatory. The question is how to lessen our stay in the purgatory as much as possible and start quickly growing again which would result in more opportunities for the business and greater optimism in the Bulgarian consumer. Companies could go bankrupt as a result of the power shock only among those of very high power intensity. The recommendation in these cases is that the economy should get oriented towards energy efficient sources.
Source: Standart (30.06.2010)

UniCredit Bulbank is going to be dubbed Bank of the Year 2009, gettning the most prestigious award for banking and finance in Bulgaria. “Bank of the Year” has been offered 13 times, having it inception in 1992. Starting this year the award is organized by the Bank of the Year Association, bringing together leading Bulgarian bankers, economists and businessmen. Apart from the main prize, the prestigious contest offers awards in specific fields, which are also going to be presented at the ceremony Monday evening. Alpha Bank is awarded in the Best Foreign Bank Branch category, Post Bank gets the Client's Bank award, ProCredit Unionbank gets the distinction for Efficiency, Societe Generale Expressbank is best at Development Dynamics, and UniCredit Bulbank gets one more award, this time in the Market Share category.
Source: Darik Radio (06.07.2010)

UniCredit Bulbank is Bank of the Year for 2009. Customers vote for Postbank this year "UniCredit Bulbank received the grand prize in the 13th edition of the Bank of the Year 2009 completion, organized by the Bulgarian Bank of the Year Association," announced yesterday Valentin Panayotov, Chair of the Board of Directors of the association. The awards were distributed at a ceremony, late last night. President Georgi Parvanov was to hand the prize to UniCredit Bulbank personally. . A total of 24 credit institutions competed for the statuette. UniCredit Bulbank received top honours in the market share category as well. In 2008, it was UBB (United Bulgarian Bank) that received the Bank of the Year award and a year earlier the prize went to Raiffeisenbank Bulgaria; Postbank got it in 2006. This year, Klassa daily was a media partner of the event. SG Expressbank received the distinction in the development dynamic category, and ProCredit Bank got the prize for efficiency. Eurobank and EFG (Postbank) received the Clients award, which was determined via online voting of over 59,000 users of the banking system. The prize for best performing branches of foreign banks in Bulgaria was awarded for a second time and it went to Alpha Bank. The awards were determined by a committee, chaired by Andrey Pramov, financial expert, and a long term Member of the Bulgarian Stock Exchange Management Board. He commented that last year the financial crisis had jeopardized even the very existence of the financial and credit systems, but the Bulgarian banks were able to tackle the situation without allowing a disturbance to the system. Pramov confirmed that banks were consolidated and have healthy balances, without being aided by any public funds.
Source: Class (06.07.2010)

The European bank groups, also represented in Bulgaria, which participated in the pan-European bank stress tests demonstrated stability and proven high capital adequacy. This is revealed by the results of the stress tests of the European banking system conducted in July 2010, BNB says in a statement. Among the tested banks are DSK Bank, UniCredit Bulbank, EIBank, as well as all Greek-based lenders. They were organized according to a decision of ECOFIN and were coordinated by the Committee of European Banking Supervisors (CEBS) in cooperation with the European Central Bank, the European Commission, and the consolidating national supervisors.
Source: Standart (26.07.2010)

UniCredit Bulbank registered a 34% drop in its profit for the first half of 2010, the Pari daily informs. Still, the bank’s BGN 88, 3 million profit was the highest compared to other leading Bulgarian financial institutions. DSK Bank’s profit for the same period fell 17, 5% on an annual basis to BGN 65, 3 million. United Bulgarian Bank (UBB) lost 9% of its gainings compared to the previous year earning BGN 48 million. Corporate Commercial Bank (Corpbank), Raiffeisenbank, Piraeus Bank, Postbank, First Investment Bank, Societe Generale Expressbank and Bulgarian Development Bank also entered the top 10 in terms of positive financial results for H1 of 2010. Corpbank achieved the highest growth of profits compared to the same period of 2009 – 30% to BGN 38 million. Alpha Bank registered the highest loss, posting a negative financial result of BGN 37, 4 million. Other banks that posted negative results were NLB West East, Emporiki Bank Bulgaria and T.C. Ziraat Bank Sofia. UniCredit Bulbank tops the ranking in terms of assets volume with BGN 11 billion by the end of June, followed by DSK Bank with BGN 8,4 billion and UBB with BGN 7,7 billion.
Source: Pari (02.08.2010)

Foreign financial institutions deposit a total of BGN 750 mln in our banking system in June Foreign financial institutions deposited nearly BGN 750 mln in Bulgaria's banking system in June, shows data of BNB (Bulgarian National Bank). The Central Bank's statistics report that these deposits reached the amount of BGN 8.85 bn. In fact, this is the main reason for the positive growth in the funds attracted into our banking system that are now BGN 60.8 bn. Thus, the record level from December 2009 was hit again. Last year, the deposits of foreign credit institutions declined by BGN 1.8 bn. Over the same period, however, banks' equity increased by BGN 690 mln, which is actually used as a substitute for the withdrawn deposits from foreign banks, since the capital in the Bulgarian banking system is held primarily by foreign banks. In May this year, financial institutions discharged ˆ358 mln of foreign debts. However, for the last 12 months, they have reimbursed a total of ˆ1.33 bn via the reduction of deposits to parent companies. According to BNB data, Bulgarians continue to save - in June alone they added overall BGN 216 mln to their bank accounts and thus the total sum amounts to BGN 26.3 bn. In June, the deposits of companies and governmental departments fell again by BGN 279 mln to BGN 18.6 bn. However, the decline is BGN 596 mln on an annual basis. Despite the crisis, the Bulgarian National Bank reports that the assets of Bulgaria's banking system rose by BGN 1.5 bn last year to the current amount of BGN 71.03 bn. UniCredit Bulbank remains the largest bank in our country with assets of over BGN 11 bn. It is ahead of DSK Bank and United Bulgarian Bank, with assets of BGN 8.46 bn and BGN 7.78 bn, respectively.
Source: Class (03.08.2010)

Unicredit Bulbank JSC - Sofia has appointed Annual general meeting on 24.09.2010. Meeting agenda includes: changes of capital or nominal.
Source: Registry Agency (06.08.2010)

Bulgarian tour operator Alma Tour will take out a EUR 17.275 million worth of loans with UniCredit Bulbank and Central Cooperative Bank (CCB), and will institute a pledge on two hotels, one company with a golf project and the receivables of all of its subsidiaries. The proposals were approved by shareholders at a general meeting at the end of last week. The proceeds will be used for the prepayment of the company’s bond which it struggled to keep up with a few months back. The company has already repaid EUR 1 million of its EUR 5 million bond issued in 2006. “We are executing major refinancing of old debt and the contracts allow us to cover them by the new loan,” Alma Tour president Lyubomir Pankovski told Dnevnik. He explained that bondholders will pocket EUR 4 million in principal and approximately EUR 170,000 in interest payments. The new loans will be only utilised for the principal. The company will tap into own funds to pay out interests. A few months ago Alma Tour encountered financial difficulties that forced it to suspend principal payments while keeping up interest payments. According to its first-half report, the tour operator has three overdrafts including one to United Bulgarian Bank (UBB) maturing in end-2010 on which it owns BGN 2.2 million as at end-June, and a further almost BGN 3 million worth of loans to DSK Bank due back in September. Alma Tour has slated a portion of the fresh money for completion of The Tamplier Hotel in the ski resort of Bansko, near Sofia.
Source: Dnevnik (11.08.2010)

Firms borrow loans of about ˆ50,000 Nearly 50% of the firms in Bulgaria, resorting to credits for turnover capital and investments, have borrowed loans amounting to about ˆ50,000, shows a survey of Klassa among the banks operating on the domestic market. Leading banking institutions commented that over the last year companies had changed their policy, orientating to smaller loans. UniCredit Bulbank reported that in the period April 2009 to April 2010 the percentage of firms that had borrowed up to BGN 10,000 increased by 10%, from 21.8% to 32.1% of all the companies in need of loans. The share of businesses that had chosen a bank financing in the range of BGN 10,000 to BGN 50,000 has also increased. According to the financial institution, two-thirds of all small firms choose to draw loans of up to BGN 50,000. MKB Unionbank reported that the average amount of requested corporate credits was about BGN 90,000. The financial institution specified that 47% of the firms wanted to borrow up BGN 50,000. The average amount of the loans extended to businesses by Postbank is ˆ40,000 and ProCredit Bank commented that the average amount of the corporate credits from the beginning of 2010 until the end of July was about ˆ27,000. The bank added that the average size of loans maturing in 24 months or less was ˆ20,000, while those with a longer term of maturity averaged ˆ39,000. CIBank said that in most of the cases the average size of requested loans was about ˆ50,000 and the tendency was for an increase in the size. Agriculture, manufacturing and the processing industries were pointed as the sectors most actively resorting to credits.
Source: Class (18.08.2010)

KZM kicks off upgrade Bulgaria’s Plovdiv-based non-ferrous smelter KZM is preparing to launch an upgrade of its lead and zinc production, an investment that has been in the planning for two years. The company will pump a total of EUR 130 million to EUR 150 million in implementing new technologies aimed at curbing its carbon dioxide footprint. The investments will be financed on a EUR 95 million loan to be provided by the European Bank for Reconstruction and Development (EBRD) and UniCredit Bulbank. Pen will be put to paper on September 1. KZM currently exports the bulk of its produce to neighbouring countries such as Turkey, Greece and Romania as well as Western Europe. The crisis has delayed its USD 200 million zinc expansion plan to 100,000 tonnes by the end of 2013. KZM, which has around 800 people on the payroll, is currently capable of producing 75,000 tonnes of zinc and 65,000 tonnes of lead.
Source: Dnevnik (25.08.2010)

Profits of the banking system drop to BGN 402 mln The profits of the Bulgarian banking system decreased by nearly 28% between January and late July, compared to the same period last year, according to the data of BNB (Bulgarian National Bank). During the first seven months, credit institutions in our country recorded a positive financial result of BGN 402 mln. However, 12 months earlier, it was BGN 547 mln. Despite the registered profit reduction, its rate of decline is falling. At the end of July 2009, compared to the same period of 2008, the slump was 35%, showed BNB statistics. We would like to remind our readers that in 2009 the positive results of the banks dwindled by half. Experts reported that in July the parameters and indices of financial institutions did not undergo substantial changes, and the amount of the loan portfolio rose slightly. The continued growth of bad loans leads to increased growth of depreciation costs and of specific credit risk provisions, stated BNB officials. The data showed that in July banks had additional depreciations of BGN 113 mln, or an increase of nearly 20% month-on-month. However, the Central Bank commented that financial institutions increased their financial and operating revenue by BGN 324 mln, or 17.1%. This, in turn, provides coverage of all operating costs and contributes to the accumulation of buffers in the system, explained experts. As regards the liquidity ratio, the coefficient calculated by BNB has been maintained at the June level and stands at 22.16%.
Source: Class (01.09.2010)

Bloomberg: Bulgaria’s indebted railways seeks loan from World Bank, EBRD Bulgarian State Railways EAD is seeking a BGN 460 million international syndicated loan to help finance debt payments through 2014 and turn around the indebted company, said Chairman Vladimir Vladimirov. The transport company is in talks with the World Bank, the European Bank for Reconstruction and Development, Deutsche Bank AG and UniCredit Bulbank AD. The funding would be linked to a five-year plan to make the operator profitable after posting losses for 20 years because of previous mismanagement and the recession, he said. “The amount is huge and it will probably be a syndicated loan lead by the World Bank and the EBRD,” Vladimirov said in an interview in Sofia today. “It is possible to reduce the borrowed amount after the reforms take effect.” Bulgaria is struggling to end its first recession in more than a decade after a three-year lending boom stalled and foreign investment dried up during the global credit crisis. The European Union’s poorest country in terms of per-capita gross domestic product is counting on increased EU demand for its metals, textiles and furniture to offset weak demand at home. The state operator controls all passenger trains and 80 percent of the rail-cargo market, where its main competitor is the Bulgarian Railway Co., a private company set up in 2005. A World Bank team will visit the railway operator in the middle of September to discuss the 105-step turnaround plan and financing needs, he said. The loan will be used to repay debts to suppliers, to the railway maintenance company and to banks. The Parliament approved state guarantees for the loan, he said.
Source: Dnevnik (01.09.2010)

The three largest Bulgarian banks to sell 'used-up' assets worth BGN 32.4 mln The three biggest Bulgarian banks have put up for public sale seized real estates worth BGN 32,449 mln, shows an inspection of Klassa on the websites of the leading financial institutions. DSK Bank is the winner in assets declared for sale. The financial institution has offered to the market immovables worth BGN 23.16 mln. UniCredit Bulbank ranked second in assets worth BGN 5.678 mln put up for tender, followed by the UBB with seized real estates worth BGN 3.606 mln. According to the inspection, Bulgaria's banks put up for tender mostly apartments, villas, lands, fields and equipment. Among the attractive proposals figure entire factories and hotels. For example, DSK Bank has offered for public sale two hotels. The first is located in the resort of Batak Dam and is categorised under "spa hotel and restaurant” with a starting price of BGN 1.488 mln. DSK is also offering a hotel in the Nessebar municipality at the price of BGN 507,000. Some of the financial institution's attractive offers also include a confectionery shop worth BGN 135,000, a pig farm worth BGN 125,000, a real estate with a petrol station at a starting price of BGN 330,000 as well as a technology line for the production of aluminum tubes and profiles at the value of BGN 1.645 mln. UniCredit Bulbank's offers for public sale refer primarily to apartments, houses and fields. UBB in turn seeks purchasers for a gas station at a starting price of only BGN 60,000 in the village of Zvanichevo, Pazardzhik district. Some of the interesting proposals also entail hotel equipment from a complex in the Bansko ski resort. So far, the deals with "used-up" assets held by banks has not yet essentially impacted the prices of Bulgaria's immovables. Meanwhile, according to imot.bg website, currently overall 738 hotels throughout the country have been advertised for sale. A total of 100 out of these are located in the Varna region and 151 in the Burgas district. The average price per sq m of the complexes varies around ˆ2,479 and the average value of a hotel stands at about ˆ1.3 mln.
Source: Class (07.09.2010)

Italian Companies to Invest EUR 3 B in Bulgaria Italian investments in Bulgaria will reach 3 billion euro till 2020, Massimo Bartocci, president of Confindustria Bulgaria forecasts. Confindustria Bulgaria unites the biggest Italian companies working in Bulgaria. Only in the next two years, Italcementi which owns Davnya cement, will invest over 250 million euro. Some 800 Italian companies work in Bulgaria as over 250 of them are members of Confindustria Bulgaria. Confindustria Balcani will be established on October 13. The new formation will unite the Italian business in the region - Albania, Bosnia and Herzegovina, Croatia, Macedonia, Serbia and Romania. "The trade between Italy and the Balkan countries reached 17 billion euro in 2009. The trade between Bulgaria and Italy amounted to 2.3 billion euro in 2009," Italy's ambassador to Bulgaria Stefano Benazzo stated. Partners of the initiatives are Levon Hampartsumyan, CEO of UniCredit Bulbank and Boris Cuchran, chairman of the Italian insurance company Generali.
Source: Standart (30.09.2010)

Unicredit Bulbank has invited its shareholders to vote a BGN 180 million capital increase so that they can return the money received in early summer as dividend on its 2009 earnings. The shareholders were warned then by Bulbank’s chief financial officer Emilia Palibachiyska that the profit sharing will have no negative effect on the bank’s capital ratios, as the company with the support of its majority shareholder UniCredit Bank Austria was planning for the third quarter of 2010 a capital increase at a rate comparable with the BGN 194.8 million distribution. The capital hike will be made through a rights issue of 24,655,650 new ordinary shares with a nominal value of BGN 1 and issue price of BGN 7.26 per share. Each shareholder will be entitled to acquire new shares proportional in number to its holding before the capital increase. Bulbank is not the only bank which distributed dividends making a commitment to the central to increase its capital. Raiffeisenbank Bulgaria and Corporate Commercial Bank (CCB) also followed suit. According to sources from the banking community, the distribution of dividends by lenders whose shareholders are listed, as is the case with Unicredit and Raiffeisen, or which are themselves public companies, such as CTC, is rather a show of the company’s financial muscle.
Source: Dnevnik (20.10.2010)

Financial and industrial group Eurohold Bulgaria has repaid the last EUR 3.4 million portion of its EUR 10 million bond, the company said in a bourse filing. The company has also paid off its all other banking obligations that fell due this month and currently has outstanding a mezzanine financing, which matures in 2015. As at end-June, Eurohold’s consolidated balance sheet included a BGN 16 million loan from Unicredit Bulbank due 2013, a BGN 30 million mezzannine debt to Accession Mezzanine maturing in 2015 and the remaining principal of some BGN 6 million of a bond which should be repaid at the end of October. In September, the company finalised the sale of its production and property portfolio in a BGN 23 million deal. In particular, Eurhold divested partially of its medical equipment manufacturer Etropal and plastics companies Formoplast and Plastchim-T, offloaded its 100% stake in minerals and industrial products testing and analyses maker Eurotest Control, its 91% stake in hotel operator Eurohotels and Iztok Plaza. Eurohold chanelled the proceeds from the transaction in its core operations, including car sales, leasing and insurance.
Source: Dnevnik (26.10.2010)

Bulgarian real estate investment trust (REIT) InterCapital Property Development intends to hike its capital via a share issue on the Warsaw Stock Exchange, company consultant Nikolay Meister told Dnevnik. The move is the REIT's second fund-raising initiative on the Polish market after launching for trade its shares on WSE's alternative segment NewConnect earlier this year. InterCapital has not yet decided on the size of the capital increase, but the transaction will most likely feature the issue of between three to six million shares, or 50% to 100% of its current shareholders' equity. The deal's size will be determined within the next weeks, after submitting the issue's prospectus with the Financial Supervision Commission (FSC) for approval. InterCapital expects to be cleared by FSC and Poland's financial watchdog to proceed with the offering by the end of the year in order to file papers for registering on the Warsaw bourse's main market by December 31, 2010.
Source: Dnevnik (29.10.2010)

Canadian Dundee Precious Metals (DPM) has decided to draw a USD 66.75 million loan from the European Bank for Reconstruction and Development (EBRD) to support its investments in Bulgaria and refinance its existing loan with the lender, DPM said on Friday. Dundee operates in the country through copper gold mining and processing companies Chelopech Mining and Balkan Mineral and Mining. The finance will be provided via Unicredit Bulbank, part of which will go towards the repayment of DPM's USD 16.25 million credit. The remaining funds will be used for financing the expansion of Chelopech's capacity. Under DPM's USD 150 million project, scheduled for completion at the end of 2011, it will seek to double its gold and copper ore output to two million tonnes a year. The finance, guaranteed by DPM and secured by a pledge of shares of the company, will be disbursed in ten equal installments, starting from June 2013. The loan will be extended at an interest of Libor plus 3.25%, which will be revised to Libor plus 2.80% after the project's completion.
Source: Dnevnik (06.12.2010)

Consumption as Achilles Heel The forecasts for the growth of the Bulgarian economy are more encouraging, according to the latest report of UniCredit Bank. This year the economy will grow by 0.1% and in 2011 ? by 2.8%, analysts believe. The improvement by 0.6% compared to the previous forecast is due to the stabilization of investments and the generation of new jobs in the industry sector. "The possibility that the growth will reach its potential of 4% before the middle of 2012 is insignificant," the analysis reads. The reasons are the slow progress the labour market makes in certain sectors and the people's considerable savings which halts the restoration of the individual consumption. The impressing rebirth the export made is not enough to rescue the rest of the economy and the personal consumption becomes the Achilles heel of the Bulgarian economy healing, the analysis says. The drop in individual consumption has even lowered in the third trimester to 5.9%.
Source: Standart (15.12.2010)