Rents in commercial streets decrease, buyers prefer malls The downward trend in the prices of rents in shopping streets in Sofia is expected to persist, shows an analysis of UniCredit for the development of the sector. Thus, rentals in the main shopping streets which are currently in the range of ˆ35-60/sq m will decline further and it will be difficult to find tenants for the premises, experts say. According to them, during the season of discounts, buyers will again prefer to shop in malls instead of stores in commercial streets. Rental levels in malls have remained relatively stable, despite the pressure on the part of tenants. Depending on the size of the premises, monthly rents vary from ˆ7 to ˆ35 per square metre. The main reason for the stable rent prices is that the average percentage of vacant space in the functioning malls has remained from low to moderate until now. However, if new space is commissioned, this might exert pressure on rental prices and these may drop. "The beneficial features offered by shopping malls have scared some of the most inexperienced retailers," Dimitar Kiferov, Head of Retail Space Department at Forton, told Klassa. "Therefore, many of them have closed their shops in the main streets and remained only in malls where rental levels are considerably lower," he added. For top international brands, however, both locations are important in terms of prestige and fair performance of the brand on the market. "Shopping streets are still of interest to fashion retailers selling footwear, apparel, accessories, jewelry, etc. However, drugstores and the so-called convenience stores (selling for small quantities of foods and snacks, beverages, tobacco, newspapers and magazines) are also active in shopping streets," commented Kiferov. Small-size commercial spaces will be preferred by the players on the market. After the opening of Serdika Center and The Mall in 2010, trade space in shopping malls increased two-fold and the total size of commercial premises reached some 200,000 sq m. In 2011, it is expected to increase by at least another 25,000 sq m after the forthcoming opening of Mega Mall. The total area of commercial sites in Bulgaria exceeded 500,000 sq m at the end of 2010.
Source: Class (06.01.2011)

Optimism Is Back Kristofor Pavlov, Chief Economist of UniCredit Bulbank The International Monetary Fund, the European Bank for Reconstruction and Development and the European Commission differ in growth expectations of Bulgaria’s GDP in 2011 – predicting 2%, 2.4% and 2.6% respectively, as the consensus prognosis is for 2.6%.The optimism of this prognosis is shared mostly by Bulgaria’s government and not so much by business. Households are also sceptical about the prospects of the Bulgarian economy. At the same time investors are doubtful about the possibility that growth rates will reach their potential estimated at about 4% y/y in 2011. What are the most frequently quoted reasons for that? The still high levels of available production capacities indicate that the investments in fixed capital will increase at a slower pace. The postponed structural reforms and the unaddressed problems in the Government’s policy concerning the business regulation mechanisms are also expected to produce a constraining effect on the rates of recovery of employment and investments. Against this background the optimism about the economic growth in 2011 is justified. The GDP growth prospects are becoming more tangible, public finances remain stable and the EU funds absorption rates are accelerating.All these facts make investors wink at the news that would have frightened them only a year ago.
Source: Standart (12.01.2011)

Bulgarian economic growth to range between 2.2% and 2.8% this year The Bulgarian economy will mark growth of 2.2% - 2.8% this year, according to the analyses of Eurobank EFG Group, Raiffeisen, UniCredit Bulbank and BNP Paribas, presented at the Euromoney conference, which was opened yesterday in Vienna. According to the expectations of the financial institutions, GDP will recover but at a slower pace than the rate envisaged by the government. The budget for next year set a 3.6 % growth. The estimates of the banking groups are closer to the expectations of the European Commission, EBRD, Fitch, the IMF and the World Bank. Experts from the Eurobank EFG group, for example, believe that growth will be in the range of 2.5% and the budget deficit will be 2.8% of GDP. Fiscal discipline will lay the groundwork for stronger economic recovery in 2011 which will pave the way for Bulgaria to join the Exchange Rate Mechanism ERM-II, stated bank representatives. According to them, the final deficit will depend not only on the development of the economy but also on this year's composition of growth. The Eurobank EFG group believes that the GERB (Citizens for European Development of Bulgaria) government remains committed to rapid Euro adoption, as soon as the internal and external macroeconomic and political conditions allow this to happen. According to economists, in 2012 at the earliest, our country will have the opportunity to apply for ERM-II accession but only if the fiscal targets are achieved. UniCredit Group experts were more optimistic in their forecast for economic growth in Bulgaria. According to their estimates, this year, GDP will grow by 2.8%, while the Treasury deficit will also be in the range of 2.8% of GDP.
Source: Class (19.01.2011)

Imminent 15% peak of bad loans in Bulgaria expected The peak of bad loans in Bulgaria will be this year, predicted Kristofor Pavlov, Chief Economist at UniCredit Bulbank at the Euromoney Forum held in Vienna. In his words, in the countries where larger economic decline has been registered, the peak of bad loan receivables is imminent. UniCredit estimates indicated that the ten largest banks in Bulgaria can cope with the increasing non-performing credits even in a range of 20% -25% without needing to raise additional capital. "We do not expect this to happen. However, on a separate note, it shows the stability level of the sector," said the economist. He predicted that loans in arrears over 90 days could reach about 15% this year as opposed to just over 10% at the end of 2010. In contrast to Bulgaria, Poland, the Czech Republic, Slovakia and Slovenia, where the recovery process has advanced, the peak of bad loans passed already in the second half of 2010. Violina Marinova, Chairwoman of the Association of Banks in Bulgaria and Executive Director of DSK Bank, also confirmed to Klassa that we could witness growth in bad loans but it will be slow-paced. "Banks have sufficient capital buffers, the system is stable, and the expected recovery of the economy should be also taken into account," explained the expert. "The peak of bad loans was in 2010. Of course, it is impossible to make these go away with a magic wand but, at least, the worst is already behind us," commented Emil Vuchkov, Marketing and Product Policy Director at the MKB Unionbank. In his words, this year, the problematic loan receivables will stop becoming larger and we will even witness a decrease in the second half of the year.
Source: Class (20.01.2011)

Bulgaria's bad loans to peak in 2011 - UniCredit Bulgaria is expected to record a peak in bad loans in 2011 unlike countries such as Poland, the Czech Republic, Slovakia and Slovenia, which saw defaults in consumer financing fade away in the second half of 2010, according to a report of UniCredit presented on the sidelines of the Euromoney central and eastern Europe conference in Vienna. According to the analysts, Bulgaria's ten largest banks have the capacity to absorb even 20% of the sour loans without securing additional capital, while the systematically important financial entities can deal with some 25% of the credits with repayments more than 90 days behind schedule. "We do not expect that this will happen, such data only demonstrates the sector's stability," said Kristofor Pavlov, chief economist at Unicredit Bulbank. According to Pavlov, bad loans will most probably reach their peak at a level of up to 15%. Meanwhile, deputy central bank governor Kalin Hristov stated that bad consumer loans already had their peak in the country last year, but defaults on corporate credits are yet to be witnessed.
Source: Dnevnik (20.01.2011)

Bulgarian banks' profit falls 21% in 2010 The combined profit of Bulgaria's banking system decreased 21% on the year to BGN 617 million in 2010, data by the Bulgarian National Bank (BNB) showed on Monday. The reason behind the decline was the considerable size of expenses allocated by local financial institutions to cover loan defaults, as well as the decline in their income due to the subdued lending. Impairment costs continued to rise in 2010, reaching BGN 1.317 billion at the end of the year, up by 26.6% compared with 2009. Non-performing loans (loans with more than 90 days delay in payments) came in at BGN 6.4 billion, representing 11.9% of banks' total portfolio at the end of December against 10.61% in September and 6.42% at end-2009. Banks extended loans worth a combined BGN 53.9 billion, up 2.7%, while deposits climbed 3.6% to BGN 63 billion. The sector's total assets stood at BGN 73.7 billion in 2010, BNB said. According to the central bank, local banks were able to cover the higher credit risk and the related additional impairment costs thanks to the income generated from core activities. The country's banking system also managed to maintain the accumulated capital buffers in the last quarter of 2010 and to report adequate financial indicators at the end of the year, the report said. Six banks booked losses in the period, including the local branches of Greek Alpha Bank and Emporiki Bank, Slovenian NLB Banka, Latvian Regional Investment Bank, Turkish Ziraat Bank, as well as Bulgarian-American Credit Bank. Banks to report a rise in earnings were Corporate Commercial Bank, Bulgarian Development Bank, Central Cooperative Bank, Societe Generale Expressbank and Postbank.
Source: Dnevnik (01.02.2011)

Banking system profits decrease by over 20% to BGN 617 mln The profits of the domestic banking system decreased by over 20% last year, according to the Bulgarian National Bank (BNB). Financial institutions in the country ended 2010 with an unaudited profit of BGN 617 mln, or BGN 163 mln down from 2009. According to BNB experts, although lower than the previous year, this is a sort of additional capital protection. Data showed that in a year, depreciation expenditures rose by 26% to BGN 1.31 bn but, nevertheless, revenues from main activities covered the increased risk and costs. At the end of December, non-performing loans overdue for more than 90 days reached 11.9% of the total volume of credits, almost double the level from a year earlier when their share was 6.42%, according to BNB statistics. According to financial institutions’ reports presented by BNB, only two banks in our country ended 2010 with profits exceeding BGN 100 mln – UniCredit Bulbank and DSK Bank, with BGN 158.7 mln and BGN 130.58 mln, respectively. In 2008, three banks reported profits of more than BGN 200 mln, and in 2009, three financial institutions had profits exceeding BGN 100 mln. An interesting shift was observed in the following positions, Corporate Commercial Bank displacing United Bulgarian Bank (UBB) from the third place and achieving a 23% profit growth to BGN 74.4 mln. Let us remind our readers that this financial institution ranked 8th in terms of profits in 2008 and climbed to the 4th position in 2009. Meanwhile, the profit of UBB shrank by 26.5% to BGN 73.6 mln.
Source: Class (01.02.2011)

Standard and Poor's has revised the outlook of Unicredit Bulbank, the Bulgarian subsidiary of Italy's UniCredit (BIT:UCG) to "stable" from "negative" while affirming its long- and short-term ratings. "The outlook revision and affirmation reflect our view that UniCredit Bulbank's business and financial profile have proven sufficiently resilient to the depressed macroeconomic and difficult operating environment of the past three years and that the bank maintained a better financial performance than peers," S&P analyst, Magar Kouyoumdjian, said. The analysts project that the bank's financial profile will remain stable, that its good earnings generating capacity would absorb further expected weakening in asset quality and that liquidity will be kept at an adequate level.
Source: Dnevnik (08.02.2011)

Banks rely on non-standard offers in the struggle for customers In the first months of 2011, banks started to compete for customers but now with non-standard offers differentiating by non-price criteria, showed a study of Klassa on actual bank proposals. "Loosening the criteria for lending may take place not earlier than the end of the year, when lower interest rates and taxes will not be a sufficient incentive," commented bankers. "As we predicted on several occasions, in 2011 banks will continue to try to differentiate by non-price criteria, especially when it comes down to mortgage lending. While in 2009 and 2010 it was enough for a bank just to advertise its loan products, now with so many banks on the mortgage market non-price differentiation is the key to success," confirmed to Klassa officials from MKB Unionbank. "At present, after almost 2 years of crisis, many customers do not have enough savings to ensure sufficient money for own participation in the purchase of a home. Therefore, we went on the market with one of the highest rates of real funding - 90%. We do not collect an application fee as well," bankers emphasised on their last promotions. Last year, MKB Unionbank launched a national information campaign, whereby customers were given a gift - a mortgage compass which enables clients to compare the bid of MKB with that of other banks. A specially prepared booklet with answers to frequently asked questions, recommendations and advice, was another promotional tool. A few days ago, UniCredit Bulbank announced its campaign providing for payment of electricity bills for a period of over half a year for customers with new home loans. Moreover, the financial institution has improved its interest rates on all mortgage loans which will be approved until May 31, as the interest rate for the first year is set to 6.10%. The fee for early repayment is suspended as well. Moreover - the bank will organize and throw a party for 10 customers who buy a new home through the product "First Home" with Maria and Rachkov. UniCredit officials promise the parties to be attended by their VIP guests - Maria Ignatova and Dimitar Rachkov. In its last promotion, DSK relies on lower interest rates. The campaign is valid as of April 8 and the maximum amount of the consumer credit to be borrowed is BGN 35,000. The collateral security is a pledge on employment receivables, on pensions or guarantees, and the number of guarantors depends on the size of the loan. The management of FiBank (First Investment Bank) is still following winter trends. For example, when paying by MasterCard YES, MasterCard PayPass credit cards or by Maestro PayPass debit cards issued by the bank, customers receive a 5% discount in some shops in the town of Bansko. In the period from January 14 to February 15, one payment via POS terminal by MasterCard YES credit card gives the client a chance to watch live the Ski Cup Feb 25-27 in Bansko, to participate in the lottery for 50 winter jackets or 100 caps. Alpha Bank even offers, until the end of March, an Alpha "Mortgage loan" without charges for application and approval. Moreover, in the period February 1 - Mart 31, customers receive a 50% discount for early repayment fee. So the fee is reduced up to 2.5% for the first 5 years, and then the fee payment is suspended.
Source: Class (09.02.2011)

No more promotions for loans and deposits The first month of the year outlined the end of a number of promotions for loans and deposits in the banking financial sector, showed an analysis of the financial guide My Money. According to the experts, the changes in deposits have again shown the course of banks, namely, lower interest rates and in some cases - elimination of some products due to the expiration of the promotion period. The interest in terms of loans was also centered around various promotional offers. Some of them expired in January and others were extended. As a whole, analysts reported that the end of January did not lead to new and more favourable proposals for bank customers. In the first month of 2011, five banks in the country suspended their promotions for their savings products, My Money specified. DSK Bank suspended its promotional offers and restored the standard interest rates. At the beginning of January again, Raiffeisenbank adjusted downwards its interest rates on time deposits, the short-term Deposit 3+3, the standard term deposits of natural persons and Deposit +. UniCredit Bulbank suspended its campaign for standard time deposits and the Nine and a Half Weeks deposit. Three banks made changes in relation to their consumer credits. Although, there is a certain stir-up in this segment, the activity is still far below the level which can outline a trend, experts commented.
Source: Class (22.02.2011)

Non-performing loans in the banking system hit a new peak at the beginning of the year. Bad loans of companies and households exceeded BGN 7.5 bn at the end of January or increased by 67%, compared to a year earlier, but only in a month, they increased by BGN 352 mln, according to information of BNB (Bulgarian National Bank).In the late summer and early autumn last year, there were positive signals that the growth of bad loans was finally over. Since October, however, the upward trend has resumed. Thus, according to BNB, the extension of problem loans has accelerated again. Bankers’ forecasts were similar. According to them, non-performing loans will continue to grow until the middle of this year and then they will gradually start to return to their normal levels. Experts from the National Bank reported that, at the end of January, the total volume of non-performing loans was 18.95% of the total amount of all loans extended, without bank overdrafts, (BGN 39.720 bn). According to the information released, businesses face most difficulties in servicing their liabilities, since every fifth company or some 20.55% have non-performing loans. Consequently, bad corporate loans reached a total of BGN 4.64 bn, compared to BGN 2.4 bn a year earlier. The rising trend in consumer loans was maintained and at the end of January 2011, these were nearly BGN 1.3 bn or 17.2% of all funds extended. Out of all mortgages amounting to BGN 8.7 bn, non-performing ones stood at BGN 1.39 bn, or 16%. Non-performing housing loans increased by nearly 50% on an annual basis. According to BNB data, in January, the total amount of loans extended in Bulgaria reached BGN 51.644 bn. Compared to the first month of 2010, the increase was merely 1.6% but economists are optimistic because there was some growth. The experts from the National Bank noted that businesses continue to be the primary users of loans. They borrowed loans amounting to BGN 31.766 mln. By contrast, households have reduced their loans. At the end of January, the total amount of withdrawn funds was BGN 18.921 bn and, compared to the same period last year, these decreased by 0.7%. The decline was mainly due to the smaller number of consumer loans. These were 2.4% less on an annual basis, while housing loans increased by 3.4%.
Source: Class (24.02.2011)

Household deposits offset the withdrawal of funds on the part of parent banks “The withdrawal of funds on the part of parent banks during the crisis was offset by household deposits,” said Rumen Simeonov, Deputy Governor of BNB, at the 9th "Banks, Investments, Money” international financial forum. “We are among the 5 EU countries which have not used public funds for the financing of their banks,” reminded the expert. At present, banks, albeit at a slow rate, extend credits and we see that the economy is recovering. A rate such as the one in 2008 will hardly be seen soon but the accumulated liquidity creates conditions for the financial institutions to offer loans more urgently. According to Simeonov, the macroeconomic environment is improving but the process will be slow, compared to expectations. The forum and Chief Economist of UniCredit Bulbank, Kristofor Pavlov, predicted an imminent reverse in the negative trends in loans - both in terms of growth and quality. "After reaching their lowest level in the middle of 2010, loans started slowly to approach normal figures," said the expert, adding that the process regarding households was driven by consumer loans, while newly-granted mortgage loans and overdraft credits lagged behind. “We expect the demand for corporate loans to accelerate, due to the recovering of more and more sectors from the recession, and higher demand will gradually involve long-term loans as well," forecast Pavlov.
Source: Class (05.04.2011)

Bulgarian banks set to resume lending Bulgarian banks have pledged to boost credit provision and curtail overdue loans after almost two years of subdued lending, according to participants in the ninth Banks, Investments, Money financial forum held in Sofia on Monday. A prerequisite for a rebound in lending is the liquidity accumulated by local banks, which was determined by Postbank's executive director Asen Yagodin as "hot". According to Gulubin Gulubov, executive head of Emporiki Bank, banks should now look at financing new projects to increase their earnings. If credit growth was indeed poor in the past year, the trend has now started to diminish and the contraction in loan portfolios is likely to be restrained, Yagodin said. In turn, Kristofor Pavlov, chief economist at Unicredit Bulbank, projected an increase of 4% to 4.5% in lending in 2011. Since late 2010, local banks have observed a slowdown in non-performing loans growth, which is a sign that they have the capacity to deal with overdue credits, according to the bankers. Over the past two years, financial institutions have mainly managed credit risk by renegotiating and restructuring existing loans, not granting new ones.
Source: Dnevnik (05.04.2011)

EMEA finance proclaimed UniCredit Bulbank the best bank in Bulgaria, the edition’s editor–in-chief Christopher Moore informed. The award is going to be announced in EMEA Finance’s new issue, which is going to be presented to the participants in the Annual meeting of the European Bank for Reconstruction and Development in Astana, Kazakhstan. For a third year in a row UniCredit Bulbank receives the prize for best bank.
Source: Standart (12.04.2011)

Cyberattack attempts to drain UniCredit Bulbank's client accounts By using dangerous cyberattacks, online fraudsters attempted to drain the accounts of the clients of the largest Bulgarian bank - UniCredit Bulbank. The so-called phishing emails were sent to the bank's clients. They were informed of a blocked session of the Bulbank Online System and were asked on behalf of the bank to follow the link in the letter so as to avoid permanent suspension and blocking of their account. The link leads to a webpage that resembles the one of UniCredit Bulbank, but has none of the bank's verification certificates. Besides the introduction of a username and password, the phishing letter requires credit card number and even PIN code. In case you have received an e-mail informing you of a blocked session in the Bulbank Online System and asking you to follow a link, we inform you that this phishing letter was not sent by UniCredit Bulbank and you should not follow the instructions in the letter, reacted instantly the Unicredit Bulbank. "If you, by chance, have entered a username and password, it is recommendable that you log on to the website of Bulbank Online and immediately change your password. If you have already provided the number of your credit card and PIN code, immediately block your card," emphasised also from the bank. Hours after the submission of signals for the phishing attack, the Unicredit Bulbank specialists blocked the fraudulent link. The bank's officials assured that all necessary preventive measures have been taken and the deposits of their clients have already been protected. Nevertheless, if the bank detects that money have been drawn illegally, it will reimburse the savings of the clients, indicated also the financial institution. The cyberattack against UniCredit Bulbank occurred only three months after another Bulgarian bank, DSK Bank, warned of a phishing raid against its clients.
Source: Class (19.04.2011)

The profits of Bulgarian banks compensate the losses from the crisis The profits of banks compensate the losses from the height of the financial crisis. During the first three months of the year, they reported a positive financial result of BGN157 mln, compared to the profit of BGN 170 mln for the same period of last year and BGN 271 mln in January-March 2009, according to BNB (Bulgarian National Bank) data. This makes BGN 1.74 mln a day, while only in March the positive financial result was BGN 70 mln. The accumulated capital surplus was BGN 2.9 bn and the total capital adequacy ratio stood at 17.66 %, indicated further the National Bank. In March, the observed downturn trend from the end of the previous year was confirmed. It relates to the decreased growth of classified assets (non-performing loans) since they increased with twofold lower pace than that in the last three months of 2010. The proportion of those with arrears of more than 90 days in terms of gross loans (excluding those extended for credit institutions) rose by 12.93%. The banks allocated another BGN 299 mln for covering the depreciation of assets, whereas in March merely, the projected sum was BGN 85 mln, indicated also the statistical data. The generated financial and operating revenues in the first quarter provided coverage of both asset depreciation and the remaining costs of the banks. As regards the market shares and assets, there is no change in the first Top 5, involving UniCredit Bulbank, DSK Bank, United Bulgarian, Raiffeisenbank (Bulgaria) and Eurobank EFG. In late March, they held 53.9 % of the assets of the bank system. Nevertheless, BNB highlighted the stronger activity of the medium-sized and small banks, which again enhanced their market shares at the expense of the group of the largest institutions.
Source: Class (02.05.2011)

The Ministry of Finance will buy 2, 000 Central Depository AD (CDAD) shares from BNB, it transpires from a central bank statement. The said shares comprise 20% of the Depository’s capital and the Ministry will pay BGN 200, 000 for the acquisition. Once the transfer is complete, Dyankov’s administration will control 41.9% of CDAD (or 44.9% via BSE-Sofia). If we add the Privatization Agency’s 1.8% stake in CDAD, it turns out the state will control a good 46.7% in the Depository. According to late 2009 stats, there is a list of commercial banks with shares in CDAD – Raiffeisenbank, Societe Generale Expressbank, DSK Bank and UniCredit Bulbank (5% each), CCB (5.1%), Eurobank (4.5%), ING Bank (3%), Cibank (1.8%), UBB (1.5%), Investbank (1.4%) and IABank (1.2%), etc.
Source: Standart (13.05.2011)

UniCredit SpA (UCG), Italy's biggest bank and Vienna-based Raiffeisen Bank International AG (RBI) have bought tender documents to broker Bulgaria's 33% stake sale in an E.ON AG unit, Bloomberg agency reported. A total of 14 financial companies have purchased tender documents. Other competitors that will probably submit bids by a May 27 deadline include Greece's second biggest lender EFG Eurobank Ergasias SA (EUROB) and United Bulgarian Bank, a unit of the National Bank of Greece SA, Bulgaria's Privatization Agency told the agency. At the end of last year Bulgaria's government announced it will list in two or three months its 33% minority stake in E.ON, one of the three power distributors in the country, to enliven the local stock exchange and boost revenues. Bulgaria, struggling to cover its widest budget deficit in a decade, plans to sell minority stakes in other energy utilities as well. In 2004, the Balkan country sold 67% in its three power distributors to Germany's E.ON, Austria's EVN and Czech CEZ. E.ON serves households in North-Eastern Bulgaria Heavily criticized for its failure to rake in revenues into the budget by privatization, Bulgaria's government is expected this year to finally go ahead with the planned sale of minority stakes in E.ON-operated electricity distributor. In 2011 Bulgaria's government should finally make its mind about how to restructure the energy holding, which groups the country's top energy assets, analysts have said. Reports say the holding will come to include only the thermal and nuclear power plants, together with the National Electricity Company NEK, after which a minority stake will be listed on the stock exchange.
Source: Dnevnik (13.05.2011)

Lending to recover. Interest rates to go down Lending has been recovering gradually, albeit slowly, because of the fragile recovery of disposable income, while interest rates on loans and deposits will go down, according to UniCredit's report on household wealth in Central and Eastern Europe (CEE) and an analysis of the Ministry of Finance on the Bulgarian economy until April 2011. The gradual improvement of labour market conditions and a more stable growth of incomes led to greater demand for loans, reported the bank. The volume of lending, however, should remain below its pre- crisis levels, said Gianni Franco Papa, Director of UniCredit's CEE Banking division. According to him, the demand for mortgage loans will continue to exceed the interest expressed in consumer crediting. Non-performing loans (NPL) of households have already reached their maximum levels in countries like Turkey and Estonia, while the NPL ratios of the rest of the region are expected to peak between the first half of 2011 and the end of the year, depending on the financial circumstances in different countries, explained Papa. Domestic NPLs levels continue to increase but at a slower pace and the upward trend is expected to reverse itself in the second half of the year, forecast the International Monetary Fund (IMF). IMF experts reckoned that Bulgarian inflation will exceed 4% this year because of high food and fuel prices. We remind our readers that the GERB (Citizens for European Development of Bulgaria) government's estimates were for inflation of 3.9%. The analysis of the Bulgarian economy until April 2011, drawn up by the Ministry of Finance, indicated that expectations for the development of inflation remained relatively high, while the increase in domestic prices will entail a contraction in consumption. Interest rates on deposits and loans will go down and the trend will persist in the second quarter of the year.
Source: Class (25.05.2011)

By end-April Bulgarian banks posted a profit of BGN 214 million, the Bulgarian National Bank statistics shows. The bank system’s profit lost 1.7% on an annual basis. Raiffeisenbank registered the highest result – BGN 33.612 million, followed by UniCredit Bulbank with BGN 33.201 million and DSK Bank with BGN 24.468 million, according to data of the central bank by 31 March. 7 from the total of 30 financial institutions operating on the Bulgarian market underwent losses, Alpha Bank suffering the most with a loss of BGN 12.6 million. Bulgarian American Credit Bank (BACB), a major share of which was recently acquired by Tsvetelina Borislavova, former Chairwoman of CIBank’s Supervisory Board, also registered a loss of BGN 7.189 million. The growth rate of resources attracted by the Bulgarian bank system from households has also slowed down compared to previous months. By end-April they amounted to BGN 28.8 million, while their volume was BGN 28.8 million in March and BGN 28.2 million in the beginning of the year. Bad and restructured credits gained BGN 140 million in April to a total of BGN 7.74 billion.
Source: Standart (01.06.2011)

Municipalities to receive up to BGN 4 mln in credits under EU projects The State will provide financial support to municipalities for the implementation of projects using EU funds with credits amounting to up to BGN 4 mln. The interest on loans from the Fund for Local Authorities and Government (FLAG) is formed of three components – current interest value of the 6-month EURIBOR at the time of the loan application, FLAG bonus, amounting to 1.715%, and the risk allowance, which is in the range of between 0.5% and 3%. Local authorities will be backed to cover the interest accrued in 2011 and the fees for debt servicing to FLAG. The funds will be provided as targeted transfers, states the government ruling, which stipulates the conditions, criteria and procedures for financial assistance to municipalities and for their access to financing from the FLAG JSC. It is envisaged that municipalities will be classified into several groups, entitled to varying degrees of support, according to the integral assessment of their credit potential. The methodology, proposed by the National Association of Municipalities in Bulgaria which was introduced in 2010, remains in force. When part of the funds for financial assistance to municipalities for 2011 is saved, municipalities will be entitled to reimburse costs incurred by them in 2009 for the payment of interest and fees for servicing their debts to the fund. The FLAG Fund was established in March 2007. Its lending activity to municipalities started in 2009. The Fund has approved a total of 148 loans, amounting to over BGN 147 mln. UniCredit Bulbank Bank has managed the Fund so far.
Source: Class (02.06.2011)

Less than 5% of households own two-thirds of the money in deposits in Bulgaria Less than 5% of the households in our country owned two-thirds, or 68%, of the money in deposits in Bulgaria last year. Despite the crisis, families managed to increase their financial assets by 12%, showed an analysis of households’ wealth conducted by UniCredit Bulbank. The growth of bank deposits contributed the most to that increase. An interesting trend observed in recent months is that the families with greater deposits have increased their size, while those with smaller savings have withdrawn their money from the banks. According to experts, the reason why less affluent households withdrew their savings was that they felt more strongly the impact of inflation, the more so as, at the end of 2010, food and beverages accounted for 36.5% of their expenses. The other reasons for the worsening financial state of the average household in the country are the declining income per capita and the rising unemployment rate. According to BNB data, there were 2,251 deposits exceeding BGN 1 mln in domestic banks at the end of March, or 111 more, compared to the same period of 2010. Out of these, 479 were held by natural persons and 1,772 – by companies. This practically means that each week two new millionaires deposited seven-digit amounts in banks. “Over the next two years, Bulgarians will continue to save money in deposits,” commented Milen Kasabov, Senior Economist at UniCredit Bulbank. “Bulgaria is the poorest member of the ‘club of the wealthy’ and this is the reason for our low self-esteem. However, we are not poor in the sense the World Bank uses this term, i.e. living with less than $2 a day,” said Levon Hampartzoumian, Executive Director of UniCredit Bulbank. In 2010, the net financial amount per capita of Bulgaria’s population was ˆ1,135, up from ˆ843 in 2009 and ˆ650 at the peak of the global crisis in 2008. However, the country has not caught up with the 2007 level – the record-high ˆ1,147 per capita, which is expected to be reached in the next two years.
Source: Class (02.06.2011)

Michele Amadei became member to the Management Board of UniCredit Bulbank, the Standart daily informs. He joins the top management of the bank after being granted the approval of the Bulgarian National Bank (BNB) for his new position. Michele Amadei is Head of Corporate, Investment and Private Banking in UniCredit Bulbank since April 2011. He joined the team of UniCredit in 2003. Since 2008 until now Michele Amadei has been in charge of Strategic Marketing, Business Development & Products at YapiÊredi, Turkey.
Source: Standart (09.06.2011)

Wealthy Bulgarians save money in deposits, Europeans - in securities In2010, almost 90% of Bulgarians’ savings were in bank deposits, while in the other EU countries this figure was below 30%. This considerable difference in the investment attitudes of our fellow-countrymen and the Europeans became evident from the analysis of the investment fund Pioneer Investments, circulated by UniCredit Bulbank. The survey on the distribution of personal finances of rich people in our country found that they do tend to risk their money and, therefore, deposit their savings in the safest and risk-free instrument - the bank deposit, while only 10% of their assets are distributed among pension funds, stocks and other financial instruments. In contrast, wealthy Europeans will increasingly rely on stocks in their portfolios and according to forecasts, 35% of their assets will be invested in this financial instrument by the end of 2011. The analysis of Pioneer Investments was based on a survey of Cap Gemini and Merrill Lynch. By comparison, at the end of 2010, the average share of stocks in the financial assets of affluent Europeans was 28%. Analysts expect investments in bonds to increase from 30% in 2010 to 31% this year. The increased interest in capital markets will be at the expense of assets invested in real estate properties which are expected to drop by 1% to 14% of the portfolio of the Europeans with the highest incomes. The calculations of Pioneer Investments show that people in Europe hold about 35% of their investments in pension and insurance funds, and have directed the rest of their savings towards capital markets
Source: Class (17.06.2011)

Levon Hampartzoumian, CEO of UniCredit Bulbank and Chairman of the Association of Banks in Bulgaria: Greece's default could lead to critical consequences such as those of Lehman Brothers - Mr. Hampartzoumian, the ceremony of the Bank of the Year Award 2011 is pending. In fact, last year, UniCredit Bulbank managed to win the big prize. What is your assessment of such events? Do you not think that too many awards are conferred to financial institutions such as the case with the beauty contests? - It is hard for me to say whether they are more or less because actually we live in a free country where different events can be organised. There are dozens of beauty contests and what not. Another question is how prestigious such awards are and how society perceives them. Obviously the winning of an Oscar movie award is more prestigious than receiving a prize from the Varna International Film Festival. - After BNB (Bulgarian National Bank) reported that interest rates on mortgage loans have returned to their pre-crisis levels, can we expect a new increase after the rise in the interest rates in the Eurozone and the EU as a whole? And could you clarify how and whether the base interest rate set by the ECB affects Bulgarian rates? - Actually, generally speaking, the basic interest rate in the Euro area affects Bulgarian rates because the Bulgarian Lev under the Currency Board mechanism is pegged to the Euro. But I must highlight that the most essential factors for the level of interest rates in Bulgaria refer to the highly robust economy, ensuring a lower level of risk as a whole. - Until recently, however, your colleagues argued that the resources of banks in Bulgaria result not from bank operations on the European markets but mainly from the domestic savings deposits. This could mean that interest rates should not be raised and do not depend on the base interest rate of the Eurozone. - There is no direct connection because the ECB does not set the interest rates in Bulgaria. However, I will repeat that there is a link between the interrelated rates of the BG lev and the Euro. And whether that relationship is direct or indirect is a matter of theoretical debates. It is a fact, but this link is certainly not automatic. That is, the base ECB interest rate is one of the components considered in the calculation of rates, in addition to other factors. - Can we expect the crisis in our southern neighbour to affect Bulgaria? - If the crisis in Greece is not kept under control, it could lead to a domino effect throughout the single-currency zone and result in daunting consequences. Let us hope that everything will be resolved favourably. - Do you think a default by Greece is probable? - The problem is that if Greece is allowed to default because there are obviously technical conditions for that to happen, the consequences might replicate the system-wide shock triggered by the collapse of Lehman Brothers. The collapse of Lehman Brothers in itself was no big deal but we saw its results and things almost went out of control. - In that case, is the Euro endangered? - As to date, it does not seem so. - Let us not forget that nearly 30% of the banking system in our country is in the hands of Greek banks. - When saying “in the hands of Greek banks” it should be borne in mind that this means nearly 30% of the capital. Let us not also forget that these banks conform to Bulgarian regulations, which are much more conservative than those in Greece. - Nevertheless, we cannot deny the existing connections between parent banks and their subsidiaries. - Of course, this cannot be denied. Anyway, I do not believe there is danger of losing deposits in Greek banks in case of tensions in our southern neighbour. The situation is quite complex and dynamic but there is no immediate danger. - Has the situation in Athens slammed the door to the Eurozone for Bulgaria? - No, quite the opposite. The single-currency union has clearly set rules for accession. When we meet the criteria and have the political goodwill of other countries, we can join the Eurozone. It is like membership in a club - you should not only have money to pay your membership fee, but the other members should like you. I do not doubt that Bulgaria will join the Eurozone. The situation in Greece is rather an example of the abuse of rights by a member of the single-currency community.
Source: Class (24.06.2011)

UniCredit quarterly analysis forecasts low inflation and a 3.3% economic growth in Bulgaria next year Bulgaria’s economic growth will accelerate from 2.8% this year to 3.3% in 2012 and inflation will be low, showed a quarterly analysis of UniCredit for Central and Eastern Europe. Economists say that among the reasons for this will be the combination of slow recovery of domestic demand and relatively high unemployment. By the end of this year, inflation in Bulgaria will continue to be a problem, despite indications of easing in the second half of the year. On an annual basis, consumer prices will reach their peak in June and July when inflation is expected to reach 6% and, by the end of the year, inflation is expected to ease down to some 4%, read the analysis of UniCredit. Economic growth in our country is forecast to lose some speed in the coming months due to difficulties in the recovery process in Bulgaria and weak prospects for the global economy. Let us remind our readers that the estimates of UniCredit are among the consecutive more pessimistic forecasts than the official Government’s projections. The 2011 Budget Act projects a 3.6% GDP growth. According to the summer forecast of the consultants from Ernst & Young, Bulgaria’s economy will grow by 3.2% this year and by 4.8% in 2012; the European Commission’s outlook is for a 2.6% increase in 2011 and a 3.8% growth in 2012; IMF expects a 3% increase this year and a 3.5% growth in 2012. The analysts of UniCredit registered a positive trend in public finances. In the first four months of 2011, the budget reported a deficit of 0.7% of GDP, compared to a twice larger deficit for the same period of 2010 (1.8% of GDP). This results from the combination of strong growth of 11% in tax revenues on an annual basis and a 3.5% shrinkage of expenditures. Analysts expect a reduction of Bulgaria’s budget deficit to below 3% of GDP this year. Consumption is forecast to increase by 0.2% and 2.1% in 2011 and 2012, respectively, and the nominal monthly remuneration will probably go up from ˆ357 this year to ˆ380 in 2012.
Source: Class (28.06.2011)

Average Salary in Bulgaria Grows by 45 Levs The average salary in Bulgaria will increase by 45 levs (reaching 745 levs) in 2012, according to an analysis by UniCredit Bank. The inflation in the country will continue growing and will be an issue till the end of 2011 and will reach its peak in June and July when its rates are expected to grow up to 6%. In the end of the year the inflation is forecasted to calm down at about 4%, the analysis reads. The team of Unicredit expects the economy growth to lose some of its momentum in the coming months. Nevertheless, the forecasts for 2012 are for accelerated growth of GDP up to 3.3% starting from 2.8% in 2011.
Source: Standart (28.06.2011)

Bulgarian economic growth to slow down in coming months Bulgaria's economic growth will slow down in the coming months in light of its weak recovery and the sluggish growth outlook for global markets, according to UniCredit's latest CEE report. Nevertheless, the analysts projected that the rise in the country's gross domestic product (GDP) will accelerate to 3.3 per cent in 2012 from 2.8 per cent in 2011 on the back of lower inflation, which will in turn facilitate the recovery of household spending. UniCredit also expects that Bulgaria will enjoy low inflation levels throughout the whole 2012, accompanied by slow revival in domestic demand but still relatively high unemployment. For the rest of 2010, however, Bulgaria's inflation will remain a concern despite some signs of improvement, the analysts said. "On an annual basis, consumer prices will reach their peak in June and July, when inflation is expected to reach six per cent before cooling down to four per cent by year-end," according to the report. The more efficient absorption of EU funds and potential permanent solution to Greece's public debt crisis, which currently curbs capital flows to the Balkans, will provide for an increase in investments to Bulgaria in 2012, UniCredit said. As to public finances, the analysts project that the country Budget deficit will be reduced to below three per cent of GDP in 2011.
Source: Dnevnik (28.06.2011)

Merely 4% of Bulgarians use banking services via the Internet Some 4% of bank customers on average use Internet banking, compared to 6% in Southeastern Europe and 30% in Central and Eastern Europe. Tsvetanka Mincheva, Deputy Director of Retail Banking at UniCredit Bulbank, announced yesterday. Our position in Europe, in terms of transactions carried out by businesses, is slightly better. Some 18% of our companies, on average, use online banking services. Bulgarian businesses, however, lag behind European ones - in Southeastern Europe, a total of 31% of enterprises use financial services via the global network, and in Central and Eastern Europe (CEE) - every second company does so. “In 2009 and 2010, the number of transactions at counters is declining, compared to those carried out otherwise,” added Mincheva. Two years ago, almost every third payment - 31% of the withdrawals in the country were made in bank offices, while in 2010 these declined to 25%. Developments in Europe were similar - in Southeastern Europe, withdrawals at counters in 2009 were 41% and declined to 29% a year later, and in CEE the figures stood at 22% and 19%, respectively. Regarding cash remittances, in Bulgaria, three-quarters of these are made at counters and merely 25% - at places other than banks, mainly ATMs. In Southeastern Europe, orders made at counters account for 64%, on average. CEE is most advanced in this respect - less than half of all cash transfers are made at counters - 42% on average. Sales made outside bank branches are still under 2% in Southeastern Europe, while Bulgarian customers still prefer to operate in bank branches, using mostly standard banking products - loans, insurances, deposits etc.
Source: Class (06.07.2011)

Societe Generale Expressbank is Bank of the Year Societe Generale Expressbank is Bank of the Year 2010 in the 14th annual contest organized by the Bank of the Year Association. "The winners in the various categories are selected on the basis of the reports that banks submit to the Bulgarian National Bank," stated Valentin Panayotov, President of the Association. According to him, this year, the evaluation of the financial institutions was carried according to three equally important criteria - market share, growth dynamics and bank efficiency. "Banks survived the crisis without serious problems," said Philippe Lhotte, CEO of Societe Generale Expressbank. According to him, Bulgaria has a very good image abroad. He added that “users should not worry about borrowing”. UniCredit Bulbank is winner in the Client’s Bank 2010 category, receiving 11,000 votes out of 45,000 possible . Citibank N.A. got the Best Bank Branch in Bulgaria award. This year’s Development Dynamics award, distinguishing the institution with largest growth, went to the Corporate Commercial Bank. The Mystery Client category was introduced for the first time and Raiffeisenbank Bulgaria is the holder of the prize. Quality of work and services were the main selection criteria under this category. "More than 500 branches all over the country have been checked twice to select the winner," said Panayotov. DSK Bank received the recognition for Efficiency and the Market Share prize went to First Investment Bank.
Source: Class (07.07.2011)

Societe Generale Expressbank, part of French banking group Societe Generale, was named Bank of the Year for 2010 in the annual ranking of the Bank of the Year Association, the organisers of the competition said. The association will also give awards for dynamic development, efficiency, market share, customer bank, best foreign bank branch, as well as its new established prize, the secret client award. UniCredit Bulbank was named bank of the customer, scooping 11 655 votes on the association's website. Citibank Sofia branch won the best foreign bank category. Corporate Commercial Bank was rewarded for best dynamics, while Bank DSK was declared the most efficient lender on the market. First Investment Bank (Fibank) was named best financial institution in terms of market share, while Raiffeisenbank scooped the secret client award.
Source: Dnevnik (07.07.2011)

OTP Bank expects 3.4% growth of Bulgaria’s economy Bulgaria’s economy will grow by 3.4% in 2012-2015, according to an analysis of OTP Bank, owner of Bulgarian DSK Bank, presented on Wednesday in Budapest. Unlike forecasts of other financial institutions, OTP says that our economy will move along with that of Romania. The Ukraine will be the region’s champion in that period, with estimated growth of some 4.7%, followed by Russia (4.2%) and Hungary (3.6%). The analysis of the Hungarian banking group is close to the estimates of other institutions. UniCredit Bulbank expects GDP growth in our country to accelerate to 3.3% on an annual basis in 2012, Eurobank EFG Group forecasts more than 2.5% growth for 2011, and the consulting company Ernst & Young predicts a 3.2% growth this year, expected to accelerate to 4.8% in 2012 and to 5.6% in 2013. According to the European Commission, Bulgaria’s economy will grow by 2.8% this year and by 3.7% in 2012. The estimates of financiers from OTP for the banking sector show that it will increase by some 12% in the coming years. The Ukraine is again the champion in terms of this indicator. Its banking sector is expected to grow by 18.7% until 2015, but this is mainly due to the fact that it is not sufficiently developed at present. Despite the good forecasts for this country, however, experts believe that it is most difficult to do business there. Moreover, consumer lending is very well developed in the Ukraine and Russia, but the other segments are still gaining momentum. Sandor Csanyi, BoD Chairman of OTP Bank, denied rumours that OTP was planning to sell its Bulgarian subsidiary. “On the contrary – we will continue to develop and support DSK. The region on which we have focused is very important to us and we are willing to become serious players in the sector,” stated Csanyi.
Source: Class (08.07.2011)

Cheaper loans for small and medium-sized businesses to be guaranteed with money from EU funds “EU funds will be used for the granting of cheaper loans to businesses,” summarised Minister of Economy, Energy and Tourism, Traicho Traikov, the benefits of a loan agreement, signed yesterday between the European Investment Fund (EIF) and five Bulgarian banks, selected under the JEREMIE (Joint European Resources for Micro to Medium Enterprises) initiative. The financial institutions (CiBank, ProCredit Bank, Raiffeisen Bank, United Bulgarian Bank (UBB) and Unicredit Bulbank) will extend to SMEs credits amounting to ˆ400 mln in the next 30 months, under guarantees of ˆ78 mln, provided by the EIF under the agreement. Four types of funds were agreed under the JEREMIE initiative, one of which is the Guarantee Fund, with a total resource of over BGN 1 bn. "Around BGN 340 mln of this money is allocated under OP Competitiveness, some BGN 60 mln is earmarked from the State budget and the rest of the funds will come from the private sector," explained Traicho Traikov. “The credit conditions for businesses will ease due to the lower interest rates and fees, there will be discounts in the collateral requirements,” pointed out the heads of the selected banks. "Banks will provide the money, the Fund will cover eventual losses," explained Stilian Vatev, Executive Director of UBB. Peter Slavov from ProCredit Bank added that the most important thing was that in this way entrepreneurs would be motivated to be more risk-prone in their investment decisions and seek more risky but profitable ventures. The maximum loan amount is ˆ1.875 mln, while the limit for projects in the transport sector is set at ˆ937, 000. There are also sectors banned from financing, such as hotel and restaurant keeping, and some farming activities. “Investment loans in BGN and Euro, and working capital loans associated with investment projects are eligible under the financing scheme,” explained experts from CiBank. Despite the fact that the heads of the five selected banks shared the opinion that, because of the guarantee provided by the EIF, the risk and interest rate for the beneficiary will be reduced, they were not willing to state in public specific figures.
Source: Class (15.07.2011)

Eight European banks do not pass the stress tests Eight European banks did not pass the stress tests for stability during a possible recession, reported news agencies, citing the London-based European Banking Authority. An Austrian bank, five banks from Spain and two from Greece. They will have to raise ˆ 2.5 bn in order to strengthen their financial positions. The five Spanish banks are: Mediterraneo - CAM, CatalunyaCaixa, Unnim, CajaTres and Banco Pastor. The Greek Eurobank EFG, owner of Postbank Bulgaria, and Ate are among the institutions that failed as well. Austrian Volksbank was also not successful. Bank executives from Volksbank criticised the banking regulator that it had not taken under consideration the measures that they had taken to increase the capital of the bank, including sales of international assets to the Russian Sberbank. The results are more optimistic than expected, as preliminary estimates indicated that between 5 and 15 banks would not cope with the tests and would need some ˆ10 bn. A total of 91 financial institutions from 21 European countries were inspected. They manage 65% of the assets of the Eurozone’s banking system. Besides the financial institutions that failed, another 16 banks were close to not complying with the requirement for a 5% share capital (Tier 1). Another banking group that operates in Bulgaria - Piraeus Bank was among these. Following the negative scenario, it is expected to remain with 5.3% share capital and even having passed the test, by April 2012, it has to meet additional requirements. The Greek National Bank and Alpha Bank (both operating in the country), and Hellenic Postbank passed successfully. The parent bank of the largest Bulgarian bank, UniCredit Bulbank, has achieved a primary capital adequacy of 6.7%, given the required 5%. By comparison, at the end of 2010, the respective index stood at 7.8%. "We appreciate the results of the European stress tests for 2011, which confirmed the capital adequacy of UniCredit," said Federico Ghizzoni, CEO of UniCredit. Should the less expected adverse scenario develop, the Group has a large buffer, compared to the regulatory required minimum level. Hungarian OTP, owner of DSK, achieved one of the highest results - 13.6%. The owner of UBB, the National Bank of Greece recorded 7.7%. Raiffeisen International reached 7.8%, and the Belgian KBC, owner of CIBANK - 10%. Spain recorded the worst results among Eurozone member-states - 7 more banks which hardly passed the tests but the largest number of audited institutions was there. Half an hour after the results were published on Friday night, the Bulgarian National Bank (BNB) issued a press release, which stated: "The findings of the tests are that both banks and banking groups in Bulgaria subject to the audits and the other banks in our country have much higher capital adequacy than the minimum levels required in the tests The adequacy of the initial capital of the banking system in Bulgaria is 15.4% and the total capital adequacy ratio is 17.7%., as the data, regularly published by BNB, on the state of the banking system show. "
Source: Class (18.07.2011)

Bulgaria's financial market has started to see an increase in demand for consumer and housing loans, according to a survey among local banks. However, the slight revival is still early to be considered a positive sign for the sector's recovery, said representatives of DSK Bank, Postbank, UniCredit Bulbank, Societe Generale Expressbank, United Bulgarian Bank (UBB), CIBank and Piraeus Bank. Despite the rise in applications for consumer loans, there has not been a significant increase in the number of loans given, according to the survey. Emil Angelov, deputy executive head of Piraeus Bank Bulgaria, said that the number of requests for housing loans in the past two quarters was higher than in the corresponding quarters of 2010 and 2009. The same trend has been observed in the consumer loans. Postbank and CIBank also have recorded increases both in consumer and housing loan applications since the start of 2011, while DSK Bank registered a spike in consumer lending in particular, which, however, is still not indicative of a steady trend. In turn, Societe Generale Expressbank reported a 50 per cent increase in consumer lending and a 40 per cent growth in housing loans. Bulgarian National Bank (BNB) data for May 2011 shows that consumer lending increased for a third month in a row, but at an insignificant level - by 11 million leva in March, three million leva in April ans 15.5 million leva in May. As to housing lending, there was a 2.6 per cent on an annual basis.
Source: Dnevnik (18.07.2011)

Investments in the Bulgarian economy will increase by 6% to 8% a year in the post-crisis period, according to an analysis of UniCredit Bulbank. However, the growth rate will be reduced almost by half, compared to the fluctuating high levels of between 15% and 20% in the boom years. The bank’s expectations for individual consumption are for an annual increase in the range of 3%-3.5%, compared to 6%-7% prior to the crisis. “The recovery of private consumption and investment to their highest levels recorded in 2008 will take time,” said Kristofor Pavlov, Chief Economist of UniCredit Bulbank. According to him, reaching pre-crisis levels is expected in the second half of 2013, considering that in Q1 2011, private consumption was still some 8% lower, compared to Q3 2008. Foreign direct investments are expected to stabilise at around 4% to 5% of GDP. Similarly, the forecast for the inflow of foreign deposits is for these to decrease from about 20% of GDP to 8%-10% in 2013-2020. The support of national savings will be necessary in order to compensate for the reduced inflow of foreign deposits. “Such an opportunity can be created with cash incentives paid by public finances to people saving in additional voluntary pension schemes, analogous to the measures discussed in the Czech Republic and Poland,” commented Pavlov.(Klassa)
Source: Standart (21.07.2011)

Investments Expected to Grow by 8% Investments to Bulgarian economy will grow by 6 or 7% in the post-crisis period, expect the economic experts team of Unicredit Bulbank. Investments will be the fastest growing component of the GDP as seen from the perspective of the final consumption. Despite these positive forecasts we cannot expect the investment growth to reach the levels of 15 or 20% as it did in the years of home demand boom. Consumption in Bulgaria will also increase and it is expected to enlarge by 3 or 3.5% a year.
Source: Standart (21.07.2011)

United Bulgarian Bank, a unit of the National Bank of Greece SA, has frozen the bank accounts of a construction company believed to be controlled by billionaire Vassil Bozhkov. Holding Roads is the leading company in the tie-in, which won the tender for the construction of the longest section in Trakiya highway, linking the city of Yambol and the town of Karnobat. "Accounts, receivables and bank tapes of Holding Roads at First Investment Bank and Bulbank, worth BGN 7.5 M have been distrained for the benefit of United Bulgarian Bank," reads a statement of the company, circulated to the media. A loan borrowed from the United Bulgarian Bank was due, but not paid, according to the bank, a claim that the company vehemently denies. The company argues that on 24 February it signed an agreement with the bank, in which the obligation to repay the loan was deferred and new terms of payment were negotiated. Holding Roads has not received official notification that the agreement has been terminated. "We are at a loss as to why the United Bulgarian Bank took these steps," the statement adds. Earlier this year an Elana trading analysts' review of indebted companies according to the main indices of the stock market SOFIX and BG40 showed that Evrohold Bulgaria, Petrol, Holding Roads and Kaolin are the companies with higher levels of debt as compared to the resources available. According to the analysis the holding companies with bigger and more complicated structure will be closely monitored by investors and their shares will most probably lag behind the developments of the market in the mid-term. Reports of Holding Roads frozen bank accounts surface half a year after Moststroy AD, another construction company believed to be controlled by Vassil Bozhkov, filed for bankruptcy after all its bank accounts were frozen because of unpaid debts. A loan borrowed from the United Bulgarian Bank, a unit of the National Bank of Greece SA, was due on May 31, but the company said it had no money. Its construction machines and other equipment have been seized by Interlease, the company that leased them. Analysts commented that the file for insolvency of Moststroy AD was very bad news for the Bulgarian capital market, but comes as no surprise. The precedent was feared to further dent the trust of the investors, particularly those from abroad, and make it more difficult to get credits from banks. Sofia City Court however rejected the application for insolvency by Moststroy AD, saying it has decided not to presume insolvency as the company has sufficient assets. Under local legislation a company, which has declared insolvency, can restructure and draw up a rehabilitation plan. Bulgarian billionaire Vassil Bozhkov has repeatedly said that the collapse of Moststroy AD will in no way impact the performance of Holding Roads.
Source: mediapool.bg (16.09.2011)

The formation of interest rates is unclear to about two-thirds of borrowers Nearly two-thirds of the consumers of banking services describe the formation of interest rates on loans as unclear, showed a study of Synovate, conducted in May 2011 and cited by Investor.bg, which involved 951 people between 18 and 69 years of age. About 59% of the respondents described the methodology for the formation of interest rates by banks as unclear, but every third respondent defined it as "totally unclear." Merely one-fifth of the respondents are aware of how interest rates are being set and merely 2% indicated that this process is "very clear". Perhaps, this is why most of the respondents specified that they wished their interest rates to be fixed - 52% opted for this option, while another 6% declared that they preferred floating rates. About 5% of the polled believed that it is correct for the rate to be formed on the basis of a fixed and a variable component. The Synovate survey showed that, in general, pessimism about the banking sector is on the rise again. Against this background, there is an increase in the proportion of people who expect a worsening of the economic conditions. DSK Bank is leader in terms of market positions in the country and every third person cites it as the first bank that comes to his mind. According to most of the respondents, the financial institution is the most popular bank on the market both in terms of its brand and advertising campaigns. Over 60% of the respondents said they had seen an advertisement of DSK recently. United Bulgarian Bank ranks second in the survey of Synovate (15%), followed by UniCredit Bulbank (9%), Postbank (8%), Raiffeisen Bank (9%) and First Investment Bank (6%). Finally, when asked about the first three financial institutions which they have in mind, the respondents pointed out DSK Bank, United Bulgarian Bank and UniCredit Bulbank.
Source: Class (27.09.2011)

Every tenth deposit in Bulgarian banks worth over BGN 200,000 Every tenth deposit in Bulgarian banks amounts to more than BGN 200,000. At the end of June, their total number reached 5,221, or 11% of total deposits, while 492 of these stood at over BGN 1 mln and another 1,500 came to BGN 500,000, according to BNB (Bulgarian National Bank) data, quoted yesterday by the Director of the Private Banking Department at UniCredit Bulbank, Ivan Dzhonov at the Forum MySuccess.bg in Finance. From June 2009, the peak of the financial crisis, until June this year, the number of deposits of over BGN 200,000 grew by the impressive 34%, while seven-digit deposits jumped by 50%. The total value of deposits also increased by 39%. According to the data, the wealthiest households in Bulgaria have in banks a total of BGN 3 bn, or BGN 574,000 per person, while half of the funds are in savings accounts worth over BGN 1 mln. UniCredit Bulbank's main criteria for the segmentation of clients as private ones include financial assets worth over BGN 350,000 and an estimated income of BGN 100,000 on an annual basis. Clients are primarily ranked in four groups – owners of companies, professional managers, legatees and free-lancers involving athletes, artists, etc. According to Diana Miteva, Managing Director of DSK Bank, pensioners can be also found in the category of wealthiest people. In the bank managed by her, there has been an almost 100% increase in the number of private banking clients since the beginning of the year, while the volume of assets under management rose by 43%. However, our richest compatriots, besides saving money due to the crisis, have become very cautious in their investments, confirmed experts from the branch to Klassa daily. "There are two major factors in the drafting of investment plans such as fear and greed. People's willingness to have cash deposit is generated primarily by the unprecedented high interest rates. On the other hand, there is fear of the unstable financial markets. In the period before the crisis, there were ordinary people who managed to sell large real estates and deposited BGN 1-2 mln in their accounts. They also joined the group of wealthiest clients.
Source: Class (29.09.2011)

Interest rates on household and business loans decline Small business and household loans continued to get cheaper in August, according to data of the Bulgarian National Bank (BNB). The companies that borrowed loans of up to BGN 1 mln in national currency, will pay an average interest rate of 8.98%, which is 0.96% less than the respective levels in August 2010. Interest rates on loans in Euros of up to ˆ1 mln, also dropped by nearly 1% to 8.76 %. Despite the decrease in the interest rates for small business loans, the price of larger loans of over ˆ1 mln increased by 2.56% to 10.07%. Consumer loans have become more affordable, however, as the average interest rate of the borrowed loans was 11.94% which is 0.64% below the cost of the funds a year before. The interest rates on new housing loans, in Euros and in BGN, were also lower - the average levels came in the range of between 7.81% to 7.71%. BNB data indicates that the Annual Percentage Rate on loans declined as well – in August it was 13.58% on the loans in BGN and 10.69 % on consumer loans in Euros. The declining trend in the deposit rates also continued, as the newly opened household bank accounts brought an average yield of 5.43% in August, which is a 0.49% drop, compared to August 2010. The interest rate on deposits in Euros fell by just 0.18% to 4.95%. Despite these trends, it should be borne in mind that merely a few days ago, the BNB statistics reported a weak growth in lending of 3.3% in August. Businesses received the largest volume of loans - BGN 32.4 mln, recording an increase of 6.1% per year. Household loans decreased by 0.4%. Mortgage lending increased by 2.2% to BGN 8.7 mln in August.
Source: Class (30.09.2011)

Bulgarian bankers: Lending is almost coming to a standstill, hampering economic growth The big problem of the economy is low consumption and the reluctance of people, on the one hand, to be encumbered by loans, despite the banks‘ activity and, on the other hand, their unwillingness to withdraw funds from their savings accounts. This is how CIBANK CEO, Peter Andronov, explained in an interview for Klassa daily, the feeble growth of crediting in our country. According to BNB (Bulgarian National Bank) data, at the end of August, the volume of loans extended to households declined by 0,4% to a total of BGN 18.98 bn, while the volume of credits to the business sector increased by over 6% to BGN 32.41 bn. "Recently, the disbursement level has been substantially higher than the one normally observed over the years. People are in a hurry to pay their loans, while the amount of the newly released ones is not so high as to prompt an overall increase of the credit portfolio, maintained Andronov. His forecast for low loan demand was also confirmed by other bank experts. The latest forecast of MKB Unionbank indicates that the tendency towards lower indebtedness levels on the part of households and businesses, compared to the levels of the pre-crisis years will continue. The latter will inhibit economic growth next year, which banks estimated at 3%. In general, households will likely remain cautious in terms of their financial decisions and consumer behaviour in the short to the medium term, according to the outlook of UniCredit Bulbank. Deposits, as the next way to stimulate consumption, also appear obstructed. Instead of withdrawing money from their savings deposits, people, on the contrary, are setting aside even more funds. At the end of August, Bulgarian citizens deposited a total of BGN 46.83 bn in their bank accounts, which marked a 12.6% growth.
Source: Class (03.10.2011)

Bulgarian banks' combined profit drops 5.1% Y/Y in August Bulgaria's banking industry recorded a combined profit of 439 million leva at the end of August, down 5.11 per cent year-on-year, Bulgarian National Bank (BNB) data shows. However, despite the decline observed in local banks' financial performance since the start of the crisis, the sector as a whole has remained profitable, with only six to eight banks suffering losses. In May, the sector registered its first annual profit growth since the onset of the financial crisis, but the 3.3 per cent increase was short-lived. Nevertheless, since February the sector has managed to curb the drop in profits to a single-digit rate against a two-digit decline in 2010. For the first eight months of the year, the combined revenue of Bulgarian banks was 844 million leva. "In August, financial institutions adhered to the model of behaviour that ensures continuous stability of the banking system," BNB said. The sector recorded a sustained increase in deposits during this period, which stood at a total 65.3 billion leva at the end of August. Household deposits accounted for nearly half of the amount, or 30.03 billion leva, growing by 240 million leva in August alone. Lending to both corporate and retail clients remained subdued in August. Housing and consumer loans went up by a meagre 0.1 per cent each to 9.4 billion leva and 9.25 billion leva, respectively. Loans to businesses went up by 187 million leva to 35.11 billion leva in the period.
Source: Dnevnik (03.10.2011)

An application to declare Alma Tour Fly, part of the failed Alma Tour group, has been lodged at the Sofia City Court, Bulgarian National Television said on October 7 2011. Alma Tour hit the headlines in summer 2011 when Bulgaria Air refused to carry passengers whose tickets had been bought through the travel group because the tour company owed the airline several million leva in debt in arrears. This disrupted the return home of many Russian, Finnish and other foreign tourists. Bulgarians holidaying in Greece and elsewhere who had bought their excursions through Alma Tour also were stranded. Special steps were taken by Bulgaria's Government, insurers and other travel industry players to get the holidaymakers home. Meanwhile, UniCredit Bulbank and Central Co-operative Bank have initiated legal procedures to recover 13 million euro in loans from Alma Tour. The company suspended its operations some weeks ago and temporary management has been appointed to draw up a plan to deal with Alma Tour's debts.
Source: Darik Radio (10.10.2011)

On 16 September United Bulgarian Bank (UBB) levied distraint upon the accounts of the four main subsidiaries of Railway Infrastructure Holding that have drawn loans amounting to a total of EUR 33 million from the bank. This is the third company related to businessman Vasil Bozhkov that faces financial difficulties. In the beginning of October 2010 Moststroy declared insolvency due to its debts. On 15 September UBB levied distraint upon the accounts of Holding Roads at First Investment Bank (Fibank) and UniCredit Bulbank. Holding Roads is one of the leading partners in the consortium building Lot 4 of the Trakiya motorway. Assets of the Locomotive and Carriage Works company are already offered for public sale, its parent company announced. Railway Infrastructure Holding suffered losses of BGN 27 million in 2010.
Source: Dnevnik (14.10.2011)

A private law enforcement officer and police are reported inside the offices of the two wide-circulation Bulgarian dailies - Trud and 24 Chassa. People close to the case have said that private law enforcement officer, Stoyan Yakimov, had been trying for two days to be allowed inside the editorial and printing offices of the media. The reason for the entry is a Court order to secure property and assets of the newspapers in favor of Hristo Grozev until his legal dispute with current owners Lyubomir Pavlov and Ognyan Donev is resolved. The Court has levied a distrainment on the printing facilities and the brand names of the two dailies and the 168 Chassa weekly until the conclusion of the trial as a guarantee that assets and properties are not going to be sold. The law enforcement officer is making a list of the property.
Source: Darik Radio (20.10.2011)

Demand for SME loans in Bulgaria has doubled over the past 12 months, experts say. Couple that with the available options for creditors to secure the money they lend via different guarantee schemes and you get the perfect setting for breakthrough offers in the segment. Thus, in four days’ time, three leading banks have launched SME loan offers. Societe Generale Expressbank offers funding at 6.95% interest in euro, secured by the National Guarantee Fund. Approval takes less than 48 hours. Raiffeisenbank’s proposition comes with a fixed interest rate for the first year – 6.8% for loans in euro and 7% for local currency debts. UniCredit Bulbank introduced its bundle Business Leader Import/Export, which provides financial intelligence and tips to exporters, willing to set foot on foreign markets and make investments there. The list of banks with active SME loan offers is long – Fibank, DSK Bank, United Bulgarian Bank (UBB), Cibank, ProCredit Bank, etc.
Source: Dnevnik (21.10.2011)

As many as five Bulgarian banks accounted for two thirds of the overall profit of the country's banking system in the first nine months of 2011, Bulgarian National Bank (BNB) data showed. Bulgarian banks' combined profit stood at 484.5 million leva in January-September, with UniCredit Bulbank, DSK Bank, Raiffeisenbank, Piraeus Bank and Corporate Commercial Bank accounting for 371.6 million leva of the total. A total of nine banks suffered losses in the period. The eight banks that recorded negative results in the second quarter were joined by the domestic branch of Turkey's Isbank, which started operations in the country in the summer. The remaining financial institutions to register losses in the period were Investbank (6.8 million leva), Bulgarian American Credit Bank (16.5 million leva), Regional Investment Bank (349 000 leva), NLB Banka Sofia (3.7 million leva), Ziraat Bank (227 000 leva), Emporiki Bank (5.976 million leva), Teximbank (1.4 million leva) and Alfa Bank, Sofia branch (30.4 million leva). The branch of Greece's Alpha Bank has been reporting losses for several consecutive years. Originally, the negative result was attributed to the bank's robust network expansion and consequently to its foray in the retail banking business and the effects of the financial crisis. Emporiki Bank, part of French banking group Credit Agricole, as well as NLB Banka Sofia and Regional Investment Bank, have also been reporting negative figures since their entry on the Bulgarian market. Investbank, which registered a loss for a third quarter in a row, has managed to keep the result almost unchanged compared to the previous three-month period. BACB, however, saw its net loss widen by about two million leva on 2010. Twelve banks reported a rise in earnings with some of the entities enjoying significant annual growth. MKB Unionbank and ProCredit Bank, for example, boosted their bottom lines by nearly three times to 4.9 million leva and seven million leva, respectively. The profit of Allianz Bank surged more than 10 times in January-September to 9.8 million leva compared to the year-earlier period. Societe Generale Expressbank reported an increase in net profit of almost 90 per cent to 38.6 million leva. The lower income of domestic banks, stemming from tight lending and rising costs for bad loan provisions, are the main reasons behind the low profits or losses of domestic banks. However, the number of banks to record losses has remained relatively stable in the past three years and the banking system as a whole has been profitable.
Source: Darik Radio (03.11.2011)

Non-performing loans to reach a new peak in 2012 Non-performing loans will reach their peak in 2012, according to forecasts of bankers in the country. UniCredit Bulbank experts predict a peak of problematic loans at the end of next year or the beginning of 2013. According to them, they will account for 17-18% of all loans at that time. The reason for the delayed record-high levels of bad debts is that in the case of natural persons’ credits it takes more time to reach the peak of non-performing loans than in the case of corporate credits. The good news is that despite the expectations for a few more months of growth in problematic loans, the provisions for bad loans are decreasing. “This is due to the fact that higher collaterals on loans are already recognised because of the decreased risk,” said Levon Hampartzoumian, CEO of UniCredit Bulbank and Chairman of the Association of Bulgarian Banks during a conference on credit risk management. He explained that the quality of loans will begin to improve if there are no serious disturbances in the economy of Europe. “Financial institutions are currently learning how to service small- and medium-sized businesses because this type of companies are still new to the market,” he added. Similar expectations for an increase in bad loans are shared by experts of MKB Unionbank as well. Its Executive Director Maria Ilieva told Klassa that the peak would be reached in 2012 if there are no serious external difficulties. “The global situation is too dynamic as a whole and it is very difficult to make even medium-term forecasts in these conditions,” said an expert. The bank expects a very slow process of recovery of growth rates in the system over the coming years, especially in 2012.
Source: Class (03.11.2011)

Banks may become the largest owners of real estate assets Banks may become the largest owners of real estate assets in Bulgaria because of the crisis. “Although their exposure to construction businesses may be small, a number of other transactions are secured by real estate properties,” Yuri Katanov, CEO of Landmark Holding, said during the BalRec conference. However, prices will continue to go down and financial institutions must therefore act with maximum flexibility when dealing with problematic assets. “Transactions in such properties will be difficult in Bulgaria,” commented Chris Bennett, Head of Acquisitions in Europa Capital Emerging Market Fund. According to the expert, the main reason for this is that it is difficult for banks to accept the fact that the prices of assets are falling and they do not show flexibility in trying to realise the pledged property of problem loans. His company has acquired Mall Sofia and Plovdiv Retail Park. The ambition of Europa Capital is to finalise one more deal worth about ˆ30-40 mln in the next three months. ":The domestic mortgage loan market still has a great potential to grow," said Maria Ilieva, CEO of MKB Unionbank. The reason for this is that Bulgaria is still behind other countries on several indicators. According to the data, the ratio between mortgage loans and the country’s gross domestic product is one of the lowest in Bulgaria, standing at 12.5%. By comparison, it is 16.0% in Hungary, 20.4% in Poland, 21.4% in the Czech Republic, 34.5% in Latvia, 40.7% in Estonia and reaching 41.2% in the Eurozone. Ilieva shared a moderately optimistic forecast for the development of the housing market, and hence – for a stir-up of mortgage crediting.
Source: Class (08.11.2011)

Bulgarian Posts needs an urgent overdraft loan agreement to cover its accounts payable. The state-owned company has invited six commercial banks to place offers, it transpires from the public procurement tender announcement, published on the website of the Privatization Agency. Bulgarian Posts reported net loss of BGN 4.45 mln for the first seven months of 2011, much worse than the projected BGN 89, 000. Bulgarian Posts owes money to a long list of clients and suppliers like VIVACOM, M-Tel, CEZ Bulgaria, Petrol AD, etc.
Source: investor.bg (08.11.2011)

Millions of leva deposited into savings bank accounts by every 5 companies and physical persons each week The number of physical persons and companies holding deposit accounts worth over BGN 1 mln in Bulgarian banks continues to increase and in the third quarter of the year these total 2,447. In a year, the list of wealthy entities was joined by 272 new ones, according to BNB (Bulgarian National Bank) data published yesterday. It was estimated that, each week, every five physical persons or companies deposit seven-digit sums into their bank accounts. The total amount of the deposit accounts of rich people in Bulgaria stood at BGN 9.35 bn, while the 520 accounts of physical individuals alone totaled BGN 1.27 bn. Compared to three months earlier, their accounts increased by 176 in number, while savings bank accounts swelled by BGN 590 mln. The average deposit millionaire holds BGN 3.82 mln in his/her savings account. The savings trend observed with respect to the richest people confirmed their fear of investing. Rather than investing in new projects, people prefer to keep their money in banks and enjoy the high interest rates. We remind our readers that the analysis of UniCredit Bulbank showed that every tenth deposit in our country is worth over BGN 200,000. According to experts of the bank, since June 2009, in the midst of the financial crisis, until June this year, the number of deposits worth over BGN 200,000 grew by the impressive 34%, while seven-digit deposits have jumped by 50%. Statistics of the Central Bank showed that, at the end of September, the growth rate of deposits in financial institutions continued to accelerate, while the volume of savings bank accounts rose by 4.6% compared to their volume from the previous quarter. The total amount of funds deposited by the Bulgarian population and companies stood at BGN 43.44 bn. Their growth in September 2010 was 13.8%, while the businesses sector held a total of BGN 13.981 bn in bank accounts. Households deposited BGN 29.461 bn. Despite the fact that deposit accounts increased in value, their number has decreased, according to the data. In late September, deposits infused into the financial system totaled BGN 12.64 mln, or BGN 50,000 less than 12 months earlier.
Source: Class (10.11.2011)

Bulgaria’s UniCredit Bulbank said on Monday it has been rehired as the managing bank of the state-owned Bulgarian Fund for Local Authorities and Governments (FLAG) for another three years. Its previous three-year contract was due to expire towards the end of 2011. UniCredit Bulbank was selected to manage the fund’s activities following a public tender procedure, the financial institution said in a statement. The bank will assist FLAG in the disbursement of credits to local municipalities and municipal companies as well as in operations related to the servicing, administering and repayment of the credits. As of the end of October, the fund had supported projects with a combined value exceeding 600 million levs ($412.9 million/306.8 million euro) under EU-funded operational programmes Regional Development and Environment, the EU Rural Development Programme, the European Economic Area Financial Mechanism, and the Cross-border Partnership Programme.
Source: Darik Radio (22.11.2011)

Bad and restructured credits exceed record-high BGN 9 bn Bad and restructured loans in the banking system continued to increase, reaching a record-high amount of BGN 9.02 bn at the end of October, showed monthly data of the Bulgarian National Bank (BNB). They already account for 22% of all credits, excluding overdrafts where there are no arrears. According to the methodology of BNB, the indicator includes both non-performing exposures (from over 91 to 180 days), losses (over 180 days) and restructured loans. From the beginning of the year till the end of October, the figure increased by BGN 1.49 bn. The increase during that month, compared to September, was BGN 222 mln after the BGN 74 mln growth registered in September, compared to August. In June and July, problematic loans grew by about BGN 340 mln per month. According to BNB’s most recent data, the share of bad loans was 14.45% as of September 30. According to the calculations of Georgi Angelov, an economist at Open Society, presented at a seminar in Bansko last week, this share is equivalent to BGN 7.95 bn. However, only BGN 0.7 bn of this amount were net bad debts and the rest were depreciated assets, provisions and collaterals. The expert stated that, against this amount, Bulgaria’s banking system has regulatory capital of BGN 9.2 bn. According to Angelov, buffers against future non-performing credits could be sought in equity capital (shareholders’ money in banks) and in attracting new funds or recapitalisation of profits.
Source: Class (24.11.2011)

KCM to modernize lead, zinc production by 2013 KCM, Bulgaria's biggest lead and zinc smelter, embarks on a large-scale investment project for modernization and expansion of its production. The smelter has negotiated a funding of EUR 95 mln, provided by UniCredit Bulbank and the European Bank for Reconstruction and Development (EBRD). The investment loan agreement was signed Sep 1 2010. The debt has a 11-year refunding term and a 2-year grace period. The two lenders cash in with equal amounts of EUR 47.5 mln.
Source: Construction City (13.12.2011)

UniCredit slashes its outlook for Bulgaria to a modest economic growth of 1.5% UniCredit's analyst team slashed its outlook for Bulgaria's economic growth next year by more than 1% from 2.6% to the mere 1.5%, reported the bank yesterday. The main reasons are the deteriorating forecast for the Euroarea's economy and the unexpected acute drop in investments in Bulgaria in the third quarter of this year. The figure is almost twice lower than the recorded 2.9% in the budget report for next year, despite the fact that the Finance Minister Simeon Djankov warned that the financial estimates will be valid even if growth is a mere 1%. UniCredit's outlook is even lower than the conservative assessment of the European Commission which sets a 2.3 % economic growth in 2012 and 3% in 2013. IMF, in turn, projected GDP growth of 1.3% for 2012 and it is expected to register growth of 1.9% in 2011. In its latest analysis, MKB Unionbank recorded a 3% growth, while Raiffeisenbank slashed twice its outlook to the modest 2%. According to the bank experts, there might be a financial upswing as early as the second half of next year. Objectively speaking, the challenges to the recovery of Bulgaria’s economy remain unchanged from those stated in the previous quarterly analysis of the economy in September, UniCredit pointed out. These are: the contraction of external demand, combined with the slow reduction of financial indebtedness of the corporate sector and a slow recovery of the real estate market and the labour market. The deterioration of external conditions will not only restrict exports but is also expected to jeopardise the stabilisation of the labour market, which began in the middle of 2011, bank experts warned. They expect the unemployment rate to be 12.3% this year, 12.2% in 2012 and 11.7% in 2013.
Source: Class (16.12.2011)

Average Wage in Bulgaria Records Slight Growth The prognoses for the growth of the Bulgarian economy in 2012 have been downgraded from 2,6 percent to 1,5 percent, shows the analysis of UniCredit for Central and Eastern Europe. Experts expect shrinking export and pressure over the labor market. The key reasons for pessimistic prognoses are economic quakes in the Eurozone and ebb of foreign investments. The GDP in 2012 is expected to rich about 76 billions leva. Unemployment rate will exceed 12 percent, while the average monthly salary will be about 750 leva set against 704 in September.
Source: Standart (16.12.2011)