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

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

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

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

Bulgarian River Shipping Corporation (BRSC) has mortgaged a ship as collateral for a bank loan from United Bulgarian Bank (UBB). According to the contract, which was signed on January 26, UBB will provide a EUR 572,500 bank guarantee to the river fleet to secure the payment of engines under a contract with Caterpillar Motoren GmbH & Co. KG. On February 14 the Supreme Administrative Court will hear the case filed by Chimimport against the selection of Kaolin of Senovo as buyer of 70% of BRSC, although the company has already pulled out of the deal. Kaolin offered EUR 13.162 million for the majority package. In December, Chimimport acquired 29.14% of BRSC on the stock exchange.
Source: Pari (30.01.2006)

Trade in UBB Platinum Bonds and UBB Premium Shares mutual funds of United Bulgarian Bank (UBB) is starting. The two funds will be registered on the unofficial market segment of the Bulgarian Stock Exchange (BSE) on Friday. Two days prior to the registration on the bourse, units in the two funds began to be offered through the bank's branches. UBB Platinum Bonds will have a low-risk profile, and will invest up to 90% of its capital in bonds and up to 20% in shares, UBB Asset Management CEO Plamen Tsvetanov told PARI daily earlier. UBB Premium Shares has a high-risk profile. Up to 90% of the raised capital of the fund will be invested in shares, up to 20% in debt securities. With the launch of the two new funds the total number of mutual funds managed by UBB Asset Management will increase to three. The company already operates UBB Balanced Fund, which registered a 16.81% return for 2005 and had BGN 4.29 million net assets at the end of last week.
Source: Pari (02.02.2006)

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

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

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

Bankers riot against credit restrictions Bankers rioted for the first time against the credit growth restrictions that the Bulgarian National Bank (BNB) prompted by the International Monetary Fund (IMF) imposed on the credit institutions. "Leave us alone to do our job," said Postbank's CEO Anthony Hassiotis during the Banks, Investments, Money International Financial Exhibition that takes place in Plovdiv. Hassiotis expressed the general opinion of the bankers against new credit restrictions aimed at lowering the credit growth to 17.5%. In 2005 the credit expansion was 32.7% and over 50% in 2004. Hassiotis pointed out that under pressure from the IMF the Bulgarian National Bank constantly surprises credit institutions by changing regulations every three months. "First, it should be analyzed how effective proved to be the changes and after that impose new regulations," Hassiotis said further.
Source: Standart (16.02.2006)

Greek banks control 20 per cent of the financial system of Bulgaria. The Austrian financial institutions have the same share. Among the Greek banks the one with the most significant share and the third one of all financial institutions owns United Bulgarian Bank (owned by the Greek National Bank) - 10,1 per cent. The Greek EFG Eurobank (owner of Bulgarian Post Bank) takes the second place in Bulgaria.
Source: Other (20.02.2006)

2005 was a bumper year for United Bulgarian Bank (UBB) which posted figures that beat the industry averages, shows data of the central bank. Profits jumped 42.4% to BGN 93.8 mln while the credit portfolio expanded by 33.33% to just over BGN 2 bln. The bank is almost equally exposed to the retail and the corporate segments. UBB, part of the NBG Group, was the nation's third biggest bank in terms of assets with BGN 3.175 bln at end-2005. The assets of the bank grew by 44% last year while the deposit base increased by 33.7% to account for 9.4% of the market.
Source: Dnevnik (20.02.2006)

United Bulgarian Bank (UBB), a member of the NBG Group, will team up with Greece’s Ethniki Insurance and AIG for the launch of 2 insurance companies. The 3 partners will sign a cooperation agreement for the creation of a life insurance and a general insurance companies that will sell their products through the UBB branch network in Bulgaria. Ethniki Insurance and UBB will each control 30% stakes in the two companies. The remaining 40% of the life insurer and its management will be in the hands of AIG Central Europe and American Life Insurance Company ALICO. The latter, together with CIS Insurance Holdings Corp., will control the management and a 40% stake of the general insurance company. AIG's other local insurance units - AIG Life Bulgaria and AIG Bulgaria, will continue to operate as independent structures. ALICO used to hold a considerable stake in Bulgaria's Postbank until mid-2004. UBB first hinted at plans to branch out into insurance in mid-2003. Back then, the bank's intention was to split evenly the ownership in the two future insurers with Ethniki. UBB's ambition was to become one of the biggest financial groups in Bulgaria. 'UBB has a sufficient growth potential in insurance thanks to its branch network and large client base, which would allow us to market combined products,' UBB CEO Stiliyan Vatev said recently. After obtaining the relevant licence from the financial supervisor, the two new companies are expected to handle UBB's entire insurance business stemming from its lending operations but will be free to service non-UBB clients as well. Bulgaria's insurance market is seen expanding by 15% in general insurance and by 27% in life insurance in by 2009, according to a survey by Business Monitor International. Preliminary data for 2005 puts domestic gross premium revenues at over BGN 1.1 bln, up by 32.4% year-on-year. A total of 31 insurers – 19 general and 12 life insurers, operate in Bulgaria.
Source: Monitor (22.02.2006)

Three Bulgarian banks have already introduced electronic generation of the new IBAN-accounts. These are First Investment Bank, ING Bank - branch office Bulgaria and United Bulgarian Bank. Special generators have been working on their web-sites (www.fibank.bg, www.ingbank.bg and www.ubb.bg) for some days. When entering the current account number, the generator shows the new one. The information campaign is about to finish by the end of May. The introduction of IBAN is a European requirement. It increases the security and the speed of payments.
Source: Sega (27.02.2006)

Bulgarian construction firm Balkanstroy issued a 5 mln euro bond earlier this week, said bond manager United Bulgarian Bank on Thursday, March 9. The interest coupon of the 5-year unsecured paper is equal to the 6-month EURIBOR+400 basis points. The debut bond of the company, aiming to raise cash for general financing purposes, will be listed on the Bulgarian bourse. The bonds, with a par value of 1,000 euro each, were purchased by Bulgarian institutional investors. Balkanstroy is co-owner and manager of several hotels in mountain resort town Bansko. The company is also involved in golf resort projects in Bansko and Balchik, on the Black Sea, as well as a number of industrial and residential developments.
Source: Dnevnik (10.03.2006)

The clients of United Bulgarian Bank (UBB), who call to the new call centre of the bank to change for example the address for receiving statements of accounts, will save BGN 6, Ms. Elena Nasalevska, manager of the customers call center of UBB, said at the official opening yesterday. On one hand this helps our clients, but also it unburdens our departments, pointed out Ms. Elena Nasalevska. On phone 0700 117 17 the clients could also get their new IBAN number.
Source: Monitor (15.03.2006)

The brand new branch of United Bulgarian Bank (UBB) opened at Obrochishte Str, near the " St. Aleksandar Nevski" Cathedral. The new office of the bank offers all services to people and companies. The clients will be able to take advantage of the main privilege of UBB - the opportunity to manage and to have access to their money through the whole branch network of the bank in real time, no matter where they had opened their accounts.
Source: Dnevnik (21.03.2006)

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

United Bulgarian Bank (UBB) has raised the ceiling for its consumer loans, extended without a guarantor, to BGN 8,000, up from BGN 5,000. The maximum amount of a loan, extended with one guarantor, has gone up to BGN 10,000. The ceiling of loans extended with two guarantors has gone up to BGN 15,000. The bank also raised the maximum term for the payment of the loans from five to seven years. UBB also introduced lower consumer loans interest rates. Consumer loans extended with guarantors and without guarantors will have an annual interest rate of 12.25% and 14.75%, respectively. The administration fee on the loans have also been reduced by half to 1.25%.
Source: Pari (19.04.2006)

The investors pay no charges and commissions to United Bulgarian Bank (UBB) as investment intermediary when they make orders in the branch network an emission or buy back deal for shares of the managed by OBB Asset management mutual investment schemes. This should be mentioned specially in the common terms of the managing company. This was yesterday ordered by the Financial Supervision Commission after a check.
Source: Dnevnik (21.04.2006)

The market share of UBB Asset Management has increased to 5.56%, the company said. The increase came after the assets of the mutual funds managed by UBB Asset management reached BGN 7.34 million. UBB Asset Management operates the UBB Platinum Bonds, UBB Pemium Shares and UBB Balanced Fund mutual funds. UBB Premium Shares and UBB Platinum Bonds were launched for public offering three months ago. UBB Premium Fund has raised BGN 1.62 million so far, while the UBB Platinum Bonds has raised BGN 1.16 million. UBB was the first bank in Bulgaria to set up a mutual fund - UBB Balanced Fund. The assets of the fund stand at BGN 4.56 million at present.
Source: Dnevnik (03.05.2006)

A bailiff entered the pig-farm in the village of Zelen dol to take an inventory of the automobiles of the company Kembarow, which will be then offered at public sale. The compulsory measure is launched because of uncovered debt of BGN 130,000 to the United Bulgarian Bank (UBB). The credit was received in 1998 for the purchase of an assembly line and equipment for the pig-farm, as a pledge over machinery and devices was constituted. The bailiff Mr. Plamen Kalaidiyski made an inventory of the pig-farm’s because of unpaid wages to the former employer Mr. Pepi Ivanovski. The pig-farm that was privatized by the grain boss Krasimir Mihailov of the town of Radomir, has a debt of BGN 60,000 to the local Regional Department of the Ministry of Interior for the use of alarm and security system. The head of the police directorate will also bring the matter to the court in a way to receive the money. The president of Kembarow Mr. Krasimir Mihailov is often mentioned in the media. In 2000 tax inspectors and police officers of Dobrich founded an attempt of the businessman former owner of Dobrudja Bank for draining funds of the Treasury. According to the inspectors Mr. Mihailov concluded a deal for transferring a part of the assets of the Dobrich-based company Piggimpex to the Pernik-based Kembarow, as the owner of both of them was Mr. Mihailov. The notional transaction is accounted with VAT included amounted almost BGN 1.4 mln, and Kembarow tried to ask the tax credit from the Sofia directorate, where it was listed as a big tax-payer. According to a source from the Dobrich Regional Tax Directorate Mr. Mihailov is behind the draining of the Balkan’s biggest pig-farm in the village of Kozloduytsi. In 1996 when he was supposed to save Dobrudaj Bank from bankruptcy he covertly transferred pigs from Kozloduytsi (the farm currently is included in the capital of Piggimpex) to Kembarow. Then VAT was drained but no respective payment to Piggimpex is accounted. In 1996 there were 80,000 fattened pigs while in March 1998 only 10-13,000 emaciated pigs were reported. The owner of the bankrupted Dobrudja Bank Mr. Mihailov was assaulted near the Radomir village Priboi not long ago. He was traveling to Radomir when gangsters shot the car and Mihailpv was injured in the left thigh. After Mihailov survived the outrage papers reminded that he is a co-owner of the grain warehouses in Dobrudja, Kembarow pig-farm in Zelen dol village, Blagoevgrad district, meat factory in Pernik and the fodder plant in Alexander Dimitrov village near Radomir. He is also former president of Minyor Football Club. Last year Krasimir Mihailov privatized Oranovo mine in Simitli.
Source: Viara-Blagoevgrad (22.05.2006)

A new holiday complex was unveiled Saturday in Chepelare, a Bulgarian town situated at an altitude of 1,232 m in the Rhodope mountains. The 4-star Rodopski Dom complex consists of a hotel section with 29-double rooms and a residential section with 22 apartments ranging in area from 67 to 138 sq m. Fifteen percent of the apartments have already been sold. The hotel beds will be marketed to potential vacationers by tour operators Thomas Cook and Balkan Holidays. Rodopski Dom is co-owned by construction holding PONS and Dimitar Dimitrov, executive director of Encouragement Bank. The main creditor of the 2.5 mln euro development was United Bulgarian Bank, said Dimitrov.
Source: Dnevnik (29.05.2006)

Farin, a distributor of pesticides and fertilisers and exporter of cereal and oil-bearing crops, has issued a 5 mln euro secured corporate bond to refinance current financial obligations and raise cash for new investment projects, said Raiffeisenbank (Bulgaria) SPJSC which led managed the private placement together with UBB. The 5-year paper will yield an interest equal to the 6-month EURIBOR+3.25%.
Source: Dnevnik (29.05.2006)

United Bulgarian Bank reported 2005 profit of BGN 91,437,771, the financial institution announced. The bank has increased its net profit by over BGN 25 mln compared to 2004. The bank’s general meeting has decided to allocate to the reserves the entire 2005 profit, as well as the retained earnings from the revaluation reserve for written-off fixed assets totaling BGN 68,101.22.
Source: Sega (30.05.2006)

The owner of United Bulgarian Bank (UBB), the National Bank of Greece (NBG), plans to buy at least one more bank in Romania, Ukraine, Serbia or Egypt in the beginning of 2007. NBG already has acquisitions in two of the countries, as well as in Macedonia and Albania. The Greek bank posted a 60% increase in profit for the first quarter of the year thanks to its investments and lower tax payments. In Bulgaria, UBB is launching a special offer for drawing cash. From the beginning of June until the end of August customers will pay 50% lower interest on cash drawings. The promotion is valid for holders of Visa, Visa Electron, MasterCard and GloBul UBB MasterCard.
Source: Pari (01.06.2006)

Bulgarian State Railways (BDZ) SPJSC plans to buy on leasing 100 second-class used passenger wagons. The most of them – about 90, will be without compartments. The delivery should be done on batches, as all the 100 wagons should be delivered to the company for period of 10 years after delegating the order. Candidates for executors of the public procurement may be Bulgarian as well as foreign persons.
Source: Dnevnik (07.06.2006)

United Bulgarian Bank, part of the NBG Group, said it has developed an internet-based application for authorised access to the Bulgarian Stock Exchange (BSE). UBB's U Broker will compete with the COBOS application offered by the BSE itself. U Broker users will not be charged an annual fee and will incur only commission and transaction charges. Deltastock and EuroFinance are the other local financial companies offering proprietary trading platforms.
Source: Dnevnik (27.06.2006)

Industrial Holding Bulgaria won the award of the Association of the investors for company with best corporate management. The competition was organized for fourth year and the ceremony was in the Military Club in Sofia. Besides Industrial Holding Bulgaria, prices won UBB in category Financial institution on the capital market with best corporate management, Blagoevgrad BT as a company with majority state shareholding.
Source: Darik Radio (30.06.2006)

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

Enemona JSC issued emission of corporate bonds with nominal value EUR 6 mln, reported the company. The raised funds will be used for financing of projects for the basic business of the company and for contracts for energy effectiveness. The bonds are naked, with 6-month coupon EURIBOR + 4,75. The emission was distributed by the United Bulgarian Bank, leading manager of the deal.
Source: Monitor (07.07.2006)

Special purpose vehicle FairPlay Properties said it will raise its capital from BGN 25.35 mln to 50.7 mln. The capital hike, the company's third, will involve the issue of 25.35 mln new shares. The minimum subscription target is 10 mln shares. The Sofia city court registered on July 18 the second capital raise performed by FairPlay Properties which enlarged the capital of the company from BGN 650,000 to 25.35 mln. The fresh cash generated by the third capital raise will be invested in ongoing projects - the Santa Marina resort complex near Sozopol and the St Ivan Rilski Hotel Spa and Apartment complex near Bansko, as well as in new business opportunities. The main shareholder in FairPlay Properties is construction and investment company FairPlay International with 71.67%.
Source: Dnevnik (21.07.2006)

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

Sevlievo-based cable and conductor producer Emka reported a record high H1 profit of BGN 2.090 mln. The result is over twofold bigger compared to the profit of BGN 918,000 reported for the same period last year. The reported results are real. They are due mainly to the clever expenditures shrinking which came as result of the manufacture’s restructure, said the company’s CEO Mr. Botev. The sales revenues also reported a significant increase of 73.5 per cent and total BGN 24.27 mln. The financial revenues amount BGN 273,000 compared to BGN 90,000 a year earlier. The higher price of the major raw material – copper rolled wire made the company’s H1 expenditures grew by over 70 per cent up to BGN 22.46 mln. Emka asked a credit from United Bulgarian Bank amounting EUR 3 mln because of the copper price hike. The credit will be used for working capital, the management specified. This increased the company’s long-term liabilities to BGN 6.93 mln compared to BGN 1.4 mln in the beginning of the year. Company’s current liabilities dropped to BGN 2.86 mln compared to BGN 5.33 mln in the end of 2005. Following a decision of the general meeting of the shareholders made in May, company’s capital was increased from BGN 448,000 up to BGN 1.79 mln. In stead of dividends the shareholders received new shares. The major shareholders in Emka are Industrial Capital Holding JSC and Kemp JSC holding respectively 33.41 per cent and 38.73 per cent. Last year the shares of the cable factory reported a 19-per cent increase at the Stock Exchange as their price reached BGN 14.76.
Source: Rositza-Sevlievo (01.08.2006)

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

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

With reference to publications in the State Gazette, issue 64/08.08.2006, and in the Dnevnik daily, issue 153/08.08.2006, about an increase in the capital of FairPlay Properties REIT-Sofia, BSE code - FPP, please be informed of the following: - Number of shares before the capital increase: 25,350,000 shares - Number of shares, offered for subscription: 25,350,000 shares - Nominal value: BGN 1.00 per share - Issuing value: BGN 1.00 per share - BSE code of the rights issued: R4FPP - Number of the rights issued: 25,350,000 - Ratio between the rights issued and new shares (right/shares): 1/1 - The capital shall be increased only if 10,000,000 shares at least have been subscribed to and paid - Every person might subscribe to at least 1 new share and at most to the number of shares equal to the respective number of the rights acquired and/or held - Initial and final date for transferring of the rights: 17.08.2006 / 01.09.2006 - Initial date for subscription to shares: 17.08.2006 - Final date for subscription to shares of the increase: 27.09.2006 - Initial date for trading with rights on the Exchange: 17.08.2006 - Final date for trading with rights on the Exchange: 30.08.2006 - Date of the Auction pursuant to Art. 112b (7) of the POSA: 11.09.2006 - Exchange member authorised to administer the capital increase: Somoni 2001 - Bank, with which the accumulation account to be opened: United Bulgarian Bank - The right to participate in the capital increase shall be entitled to all shareholders who have acquired their shares within seven (7) days following the announcement in the State Gazette at latest, i.e. as of 15.08.2006 (Record date). - The final date for transacting shares of this company on the BSE-Sofia, in result of which the holder will have the right to participate in the capital increase, will be 11.08.2006 (respectively Ex date: 14.08.2006).
Source: State Gazette (08.08.2006)

Special purpose vehicle (SPV) FairPlay Properties said it will double its capital to 50.7 mln levs through the issue of 25.35 mln new shares. The minimum subscription target is 10 mln shares. Agro Finance is another local SPV that will perform a capital hike. The company will offer 150,000 new shares with a nominal value of 1 levs each.
Source: Dnevnik (09.08.2006)

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

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

Bulgaria's financial regulator granted licences Wednesday to 2 new insurance companies incorporated jointly by United Bulgarian Bank (UBB), Greek insurer Ethniki and AIG of the U.S. The launch of the life and general insurance companies diversifies further the UBB financial group which, in addition to UBB, already features UBB Asset Management and leasing company Interlease. The UBB insurance company will steer clear of the motor insurance segment which is light on profits and heavy on claims. The existing AIG subsidiaries in Bulgaria - AIG Life Bulgaria and AIG Bulgaria, will continue to operate independently. The entry of Greece's Ethniki brings to 14 the foreign companies represented on the Bulgarian insurance market. Some of the more high-profile names include Italy's Generali, Germany's Allianz, Austria's Wiener Staedtische and ING. UBB AIG Life Insurance Company, launched with a capital of BGN 6 mln, is 30 per cent-owned by UBB, itself part of the NBG Group, with AIG Co. controlling 40 per cent and the remainder owned by Ethniki. UBB controls 30 per cent of UBB AIG Insurance and Reinsurance Company, launched with a capital of BGN 5.4 mln, as does Ethniki with AIG Central Europe and CIS Insurance Holdings Corp. controlling the remainder. The Bulgarian market accommodates 32 insurance companies: 19 general insurers and 13 life insurers. Domestic insurance premiums added up to BGN 588 mln in the first half of 2006 with BGN 505 mln coming from the general insurance segment and BGN 83 mln from life insurance.
Source: Dnevnik (24.08.2006)

A new player has appeared on the Bulgarian insurance market after the Financial Supervision Commission licensed UBB-AIG Life and UBB-AIG Insurance and Reinsurance Company. Thus the plans of National Bank of Greece (NBG), which is owner of United Bulgarian Bank (UBB), to offer its clients insurance services have come to fruition. In practice two of AIG's subsidiaries, American Life Insurance Company (ALICO) and AIG Central Europe & CIS, join their efforts with NBG's subsidiaries UBB and Ethniki Insurance. Ethniki and UBB will hold 30% each in the joint ventures. The remaining 40% and the management will be controlled by ALICO and AIG Central Europe & CIS (in the life and the general insurance company, respectively).
Source: Pari (24.08.2006)

Bulgarian company Viva Agrotex has launched a bio ethanol factory in Alfatar, a city in North-eastern Bulgaria. The BGN 15 mln factory, designed and outfitted by Austrian biotechnology company Vogelbusch, is located on a 18 ha land plot. It has a daily processing capacity of 30,000 liters. The facility will process wheat, maize, barley and hay. The output will initially be exported to Germany and Austria but, over the longer term, should be marketed exclusively on the domestic market.
Source: Dnevnik (04.09.2006)

The EBRD Thursday announced the disbursement of a total of 15 mln euro to 2 Bulgarian lenders - United Bulgarian Bank and Commercial Bank Allianz Bulgaria. UBB gets a fresh 10 mln euro resource to help the nation’s industry become more energy efficient with the help of another EBRD loan. An initial 15 mln euro EBRD loan on-lent by UBB helped more than 20 private industrial businesses cut energy waste significantly or produce energy more efficiently. The loans are provided under the Industrial Energy Efficiency and Renewable Energy Framework, set up in 2004 by the EBRD together with the Kozloduy International Decommissioning Support Fund and the Ministry of Energy and Energy Resources through the Energy Efficiency Agency. The framework originally comprised 50 mln euro of EBRD financing onlent to six participating banks, and was extended in 2006 with the EBRD making available a further 55 mln euro. Under the framework, participating banks such as UBB receive funds from the EBRD that they on-lend to private-sector industrial enterprises. Businesses use the finance to improve energy efficiency by, for example, introducing better energy consumption, automation, control and heat recovery systems, and promote the use of renewable energy technologies. The EBRD is further lending Commercial Bank Allianz Bulgaria 5 mln euro to support the development of local small and medium-sized enterprises. The loan comes under the EU/EBRD SME Finance Facility and is being complemented by a 1 mln -euro-grant from the European Commission for technical assistance and financial incentives. CB Allianz Bulgaria aims to use the proceeds of the EBRD loan and the EC grant to streamline its approach to SME lending. The EBRD has an important strategic partnership with Allianz Group, whose parent company Allianz AG is the largest insurer in the EBRD’s countries of operations. The EU/EBRD SME Finance Facility, a joint programme of the European Commission and the EBRD, supports the development and growth of SMEs by facilitating their access to finance. Under the program, the bank will make available funding of 1.1 bln euro. The EC has contributed ?156.75 million in grant financing since the launch of the program in 1999.
Source: Dnevnik (29.09.2006)

The European Bank for Reconstruction and Development (EBRD) provided a EUR 15 million credit line to two Bulgarian banks. Allianz Bulgaria received EUR 5 million under a programme of the EBRD and the European Union for financing small and medium enterprises. The loan is complemented by a EUR 1 million grant from the European Commission for technical assistance and financial incentives. United Bulgarian Bank received EUR 10 million under a programme for industrial energy efficiency and renewable energy sources. The programme was set up in 2004 by the EBRD, the Kozloduy International Decommissioning Support Fund, and the ministry of energy.
Source: Monitor (29.09.2006)

Private equity fund Polish Enterprise Fund IV will spend 50 to 60 mln euro on the acquisition of one or two Bulgarian corporations, Dnevnik learned from Stanislaw Knaflewski, a partner at fund manager Enterprise Investors. In Bulgaria, Polish Enterprise Fund IV will be targeting retailers and companies active in consumer lending and leasing, said Knaflewski. Polish Enterprise Fund IV has raised 658 mln euro so far and as much as 330 mln euro of that amount has been earmarked for acquisitions in Central and Eastern Europe, excluding Poland. Enterprise Investors has so far registered 5 private equity finds that have accumulated investments of some 900 mln euro in over 100 corporations in the region. Enterprise Investors partnered Vienna-based Viva Ventures in the take-over of Bulgarian telecom BTC 2 years ago.
Source: Dnevnik (29.09.2006)

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

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

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

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

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

KDN, the Gabrovo-based maker of uPVC, PE and PP pipes, will apply for a EUR 3 mln 7-year investment credit and a EUR 0.6 mln 1-year working credit from the United Bulgarian Bank. As loan security, the company will mortgage an administrative building and will register a special pledge on the production equipment that will be bought with the credits. KDN is currently repaying a EUR 4 mln investment credit and a EUR 1.5 mln working credit provided by Raiffeisenbank in late Aug.
Source: Dnevnik (11.10.2006)

Raiffeisenbank Bulgaria has opened five offices in the past month. For the first time the bank has set foot in Svishtov and Elin Pelin, and new offices have been also opened in Sofia, Shumen and Yambol. Thus Raiffeisenbank's points of sale have reached 103, including 90 offices and 13 outlets at the National Revenue Agency's directorates. The offices offer the full range of banking services for corporate and institutional clients, small and medium enterprises and individuals, including credits, deposits, payment accounts, debit and credit cards, forex operations and deals in securities, e-banking, international money transfers etc.
Source: Standart (12.10.2006)

United Bulgarian Bank (UBB) increased the maximum amount of its Business Energy micro-loans extended to small and medium sized enterprises (SME) from BGN 50,000 to 100,000. Companies, craftsmen, agricultural producers and free-lancers are eligible to apply for the micro-loans, which are extended in Bulgarian leva and US dollars. The repayment period is set at up to ten years for investment loans and up to five years for working capital loans. The bank offers a promotional 6% interest rate for the first year for loans in leva. The promotion is valid until December 31, 2006. Real estate, machines, transportation vehicles and goods may be offered as collateral for the loan. The Business Energy program is supported by EU's SME Finance Facility and the European Bank for Reconstruction and Development (EBRD). UBB also raised the maximum amount of its Efficiency and Phoenix loans for energy efficiency and renewable energy sources, respectively, to EUR 2 million. The bank also extends a subsidy amounting to 7.5% of the value of the Efficiency loan and offers a free-of-charge preparation of the business projects. The subsidy extended in addition to the Phoenix loan amounts to 20% of the value of the loan. Companies with private majority ownership are eligible to apply for the loans.
Source: Monitor (20.10.2006)

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

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

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

Bulgaria's banking industry created 1,692 jobs in the 12-month period ending June 2006, shows industry data. The local commercial banks now have a collective workforce of 25,224. Assets per staffer stand at BGN 1.4 mln, up BGN 0.24 mln year-on-year. The average payroll cost per employee is BGN 1,350, including social and pension security.
Source: Dnevnik (07.11.2006)

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

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

Bulgaria's financial regulator has issued a licence to Real Finance Asset Management, an asset management company 95 per cent-owned by the local Holding Varna A. It was not immediately clear what type of assets the new company will manage. Bulgaria has 22 asset management companies. Only 3 of them do not manage mutual funds.
Source: Dnevnik (24.11.2006)

Competitiveness decreases interest rates "Severe competition and Bulgaria's EU accession will lower interest rates on bank loans after 2007," said Hristos Katsanis, CEO of United Bulgarian Bank. After January 1, 2007, the banks registered in the EU will be able to operate in Bulgaria without obtaining a license from the Bulgarian National Bank. "In a few months the market will undergo a drastic transformation but the Bulgarian banks are ready for the European competition," Mr. Katsanis said further. Another reason for the decrease of interest rates is the forthcoming introduction of the euro in Bulgaria. According to Katsanis, local financial institutions will compete mainly for attracting more deposits by offering more interesting products.
Source: Standart (29.11.2006)

Bulgaria's Sviloza plans to raise its capital to BGN 40 million in the next four years, the chairman of the Svishtov-based company's board of directors, Krassimir Dachev, said. Sviloza has developed two investment programmes until 2011. The first stage includes reconstruction, the second - due to start after 2009 - concerns the construction of a paper mill worth EUR 150 to 200 million. Currently the public company is making marketing research of paper demand on the Balkan market. Another large-scale project is the construction of a household waste incinerating plant on Sviloza's ground. The company's management expects income to triple to BGN 140 million in 2011. In the next four years EBITDA has to reach BGN 46 million. The assets managed by the company are seen rising to BGN 199 million from BGN 85 million for 2006.
Source: Pari (04.12.2006)

Banks prepare special, more flexible offers for SMEs that win the EU financing. This became clear at the opened yesterday exhibition Finexpo. “The bank sector should provide suitable credit products for those companies. We consider to even finance up to 100 per cent the project of a company that has won a grant” – yesterday said Mr. Aleksandar Dzhoganov from DSK Bank. On principle the companies, which have won projects, are being financed by the EU funds from 50 to 80-90 per cent and the rest of the money should be provided by the companies themselves. Moreover the business gets its money not at the projects approval but at its implementation.
Source: Sega (07.12.2006)

More than 89% of the small and medium sized enterprises in Bulgaria have never applied for financial support, Alexander Dzhoganov of Banka DSK Said at the opening of the FinExpo financial exposition. Bulgarian companies are still unprepared to absorb funding from the EU. One of the major reasons for companies not to apply for funding is the insufficient capacity to participate in projects funded under EU programmes, Dzhoganov added. Another obstacle is the insufficient awareness, as well as the red tape. Some 29% of the companies pointed out that they had not applied for funding due to the lack of information. A total of 41% of the companies did not know that the EU funds existed. Some 50% of the companies plan to use the funding for technological upgrade, while 36.9% will use it to align their operations with the EU requirements. Some 20.4% of the companies will use the funding for innovations, Dzhoganov said.
Source: Pari (07.12.2006)

For six months since the start of operations in Bulgaria, Deutsche Bank has participated in projects worth BGN 1 billion, the bank's representative for Bulgaria, Pavel Ezekiev, said. Deutsche Bank in Bulgaria is interested mainly in investment projects in energy, bridge and road construction. Currently the bank is working on seven projects, four of them in the field of venture investment. Deutsche Bank's share in investment banking this year is between 10 and 15%. The share is expected to double in 2007, Ezekiev said.
Source: National radio (22.12.2006)