Corporate energy use in Bulgaria said 50% above EU average Bulgarian businesses consume nearly 50% more energy than the average corporate usage in the EU, Petr Dokladal, Regional Manager of CEZ, said. Dokladal and Kolyo Kolev, head of the Executive Energy Efficiency Agency (EEEA), signed 18 January an agreement for energy efficiency measures. Dokladal also said retail consumers in Bulgaria used 40% more electricity than households in Europe. Time was right for a national strategy for energy efficiency, he said, adding CEZ would take an active part in the development process.
Source: expert.bg (19.01.2011)

Bulgarian blue chip First Investment Bank (FIBank) [BUL:5F4] said on Monday it acquired 100% of local consultancy Balkan Financial Services. FIBank bought 100 shares in Balkan Financial Services for a total price of 5,000 leva, the bank said in a statement filed with the news service of the Sofia bourse. The bank did not disclose any further details about the deal.
Source: money.bg (08.02.2011)

Commission for Protection of Competition (CPC) has authorized the owner of TPP Brikel - Kalista 2004 to be purchased by the company Moller Corp.. The latest is registered in Seychelles and is represented by Johanna Lindsey Rita Alsindor, explained by the CPC. In addition to TPP Brikel, the company has acquired Trajal Bulgaria, which is a subsidiary of Serbian tire plant. Both companies are associated with businessman Hristo Kovachki. The thermal power plant near Galabovo had to stop in September 2010 because of excessive pollution and depleted permits to operate. Because of that, the company provides heating to Galabovo its closure was postponed.
Source: Class (09.03.2011)

Bulgaria’s energy regulator said it extended the electricity and heat production licence of coal-fired power plant Maritsa 3 by five years until the end of 2015. Maritsa 3 requested on February 18 a ten-year extension of its licence, saying that the company is financially stable, it has the necessary infrastructure and qualified personel and its main facilities are in good technical condition, the State Energy and Water Regulatory Commission (SEWRC) said. The regulator however, extend the power plant's licence by five years only, as it deemed the plant's financial condition was poor and because of the plant's urgent need to renovate its production facilities in order to comply with EU environmental requirements. The regulator added that Maritsa 3 is allowed a total of 20,000 hours of work by the end 2015 taking into account its harmful emissions but will reach this allowance already in September of this year.
Source: Dnevnik (14.03.2011)

Bulgaria's First Investment Bank (FIBank) has placed a EUR 20 million bond, which will allow it to boost its credit portfolio by more than BGN 320 million, the bank said on Thursday. As the bank plans to add the debt instrument to its tier one capital, it has no maturity and could be used for covering potential losses, as required by the Bulgarian National Bank (BNB). The bond carries a coupon of 12.75%, well above market average. According to FIBank investor relations director Vassilka Stamatova, the level of interest can not be compared with interests on similar market transactions, as this is a brand new instrument for the Bulgarian market. FIBank's consolidated profit declined to BGN 27.8 million in 2010 from BGN 30.1 million a year earlier, while its non-consolidated profit dropped by BGN 1.2 million to BGN 30.8 million.
Source: Dnevnik (25.03.2011)

First Investment Bank JSC - Sofia has appointed Annual general meeting on 10.05.2011. Meeting agenda includes: adoption of the Annual Report for Year 2010.
Source: Registry Agency (29.03.2011)

A newly established company pays BGN 316 mln for the Kremikovtzi metallurgical plant “The assets of the Kremikovtzi metallurgical plant declared once again for sale at public auction were acquired yesterday by Eltrade Company,” said the trustee in bankruptcy of the plant, Tzvetan Bankov. He was not able to release more details about the deal, but said that the documents of the company had been in perfect order. “The company’s representatives paid the 10% deposit of BGN 31.6 mln, and until next Monday should remit the remaining BGN 316 mln,” said Bankov. The manager of the company is a 25-year-old man - Lachezar Varnadzhiev and the company was the only one to particpate in the auction. Bankov presumed before Klassa that the company had been created exclusively for the purchase of the detached part of the plant. It will get the production site with office buildings. The assets comprise a terrain of approximately 8100 decares , and the administrative buildings on it, the commercial directorate of the plant and some movable property such as cars. After the previous auction, in November, Bankov told Klassa that the aim was not maintain the activities of the company, but just to cashi its assets. The scope of activity of Eltrade Company, as stated in the Commercial Register covers trading in ferrous and nonferrous metals and production activities. Varnadzhiev, who is the sole proprietor of the company, is from the town of Belene. His name appears in the list of the Chamber of Engineers in Investment Design. Yesterday, he declined to explain how he intended to find the necessary means for the acquisition until Monday. This is the deadline for the transfer of BGN 316 mln to a special account of Kremikovtzi in the Bulgarian Development Bank. The potential owner refused to speak with the trustee in bankruptcy as well, said Bankov yesterday . Company Nadine-N was registered at the specified address of Eltrade Company, show the records in the Register. “The Sofia City Court should check the deal, and has to rule on the accession to the estate. After that the property will be transferred to the Eltrade Company,” said Bankov.
Source: Class (13.04.2011)

Bulgarian Fibank extends EUR 59m loan to Kremikovtzi's buyer Bulgarian First Investment Bank (Fibank) has provided a EUR 59 million loan to Eltrade Company, the firm which won the tender for the production assets of insolvent steel mill Kremikovtzi on Tuesday, the bank said. "First Investment Bank considers this is an ordinary commercial transaction, which will contribute to the recovery of economic activity in Sofia," the bank said in a statement on Wednesday. The lender sees no risk of default as the company has already entered into preliminary agreements to sell part of the steel maker's non-operational assets. Eltrade declined to comment on its plans about Kremikovtzi, but Fibank said that part of the production at the plant could be resumed. Eltrade agreed to pay by mid-April BGN 316 million for the indebted plant, which finally found a buyer after several unsuccessful attempts. The firm, owned by Lachezar Varnadzhiev, 26, is linked to local metal recycling company Nadin. It is still unclear how the company will finance the remaining part of its investment, or about BGN 200 million.
Source: Dnevnik (14.04.2011)

Eltrade Company pays full price for Kremikovtzi Eltrade Company, the buyer of Bulgaria's indebted steel maker Kremikovtzi, has transferred BGN 284.4 million to the plant's account at the Bulgarian Development Bank to pay for the mill's production capacities, Bulgarian news agency BTA reported on Thursday, citing Kremikovtzi's bankruptcy trustee Tsvetan Bankov. The company was required to transfer the sum by April 18, deducting the BGN 31.6 million deposit it had paid for taking part in the tender. Eltrade Company, set up in March 2011, agreed to buy the production assets of the insolvent steel mill for BGN 316 million leva on April 12. Later that week, First Investment Bank (Fibank) said it had provided a EUR 59 million loan to the company to back its investment.
Source: Dnevnik (15.04.2011)

Bulgarian Fibank provides entire financing for Kremikovtzi purchase Bulgarian First Investment Bank (Fibank) has provided the entire sum of BGN 316 million for the takeover of indebted steel mill Kremikovtzi, the lender said on Friday. The amount is covered by receivables on the agreements with foreign contractors, which stipulate the sale of the plant's production assets. According to the statement, Fibank has provided bridge financing to Nadin Metals Trade and Velpet Konsult, strategic partners of the single company that showed up at the tender for the plant on April 12, Eltrade Company. The announcement comes two days after the bank said it had extended a EUR 59 million loan to Eltrade without clarifying that it had provided the entire sum for the acquisition. In the meantime, the National Revenue Agency (NRE) said it was starting a tax audit of the buyer's owner, 26-year old construction engineer Lachezar Varnadzhiev. The probe is intended to examine the origin of funds needed for the acquisition, all transactions of Eltrade with other companies and individuals since the company's creation and any taxes that may have originated from cash flows before and after the deal.
Source: Dnevnik (18.04.2011)

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)

Bulgaria's Bankrupt Steel Mill Buyer on Watchlist over Taxes Bulgaria's state revenue agency has vowed to keep a non-stop watch over the tax papers of the buyer of the country's biggest steel mill Kremikovtzi as many question marks surround the deal. Bulgaria finally sold earlier in April the production assets of bankrupt Kremikovtzi steel mill in a fourth auction to a newly established local company, owned by 26-year-old Lachezar Varnadzhiev. The deal was signed just a month after "Eltrade company" was established on March 8, 2011 with a capital of mere BGN 20 000, a check in the Trade Registry shows, triggering suspicions who stays behind it. It is Varnadzhiev's only company and it is supposed to be a black and colored metal dealer. "The sale of Kremikovtzi is very mysterious, but we have already launched a probe," the head of the revenue agency Krassimir Stefanov said. The probe, which has been initiated personally by the head of the revenue agency Krassimir Stefanov, tracks down the origin of the money used for Kremikovtzi purchase, the company's transactions with other companies and physical persons and the taxes submitted before and after the deal. "Now the origin of the money is clear," Stefanov said, referring to the announcement of Bulgaria's privately-owned First Investment Bank (FIBank) that it has extended a loan for the acquisition of the country's biggest steel mill Kremikovtzi.
Source: Darik Radio (27.04.2011)

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 General Meeting of the shareholders of First Investment Bank JSC - Sofia, Bourse code 5F4, which was held on May 10, 2011, decided not to distribute dividends for 2010. The company reported a profit to the amount of BGN 30 838 thousands.
Source: Capital market (12.05.2011)

Global rating agency Fitch has revised to "positive" from "negative" the outlook on three Bulgarian banks, namely Societe Generale Expressbank, Allianz Bank Bulgaria and Bulgarian Development Bank. In addition, the agency changed the outlook on First Investment Bank (FIBank) to "stable" from "negative". The revision follows the same action on Bulgaria, which concerned its long-term foreign and local currency issuer default ratings (IDRs) of BBB- and BBB, respectively. The ratings of Societe Generale Expressbank and Allianz Bank Bulgaria reflect the potential support from their shareholders and also benefit from the financial strength of their respective parents, French banking group Societe Generale and German insurer Allianz, the agency said. The improved outlook on Bulgarian Development Bank follows the same action on the sovereign, as the state is a majority shareholders in the entity. The revision in FIBank's outlook to "stable" is a result of the modest likelihood of support from the local public authorities, in times of need, given the bank's importance to the country's financial system.
Source: Dnevnik (26.05.2011)

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)

Kremikovtzi’s bondholders to receive only BGN 80.5 million Holders of Kremikovtzi’s EUR 325 million bond emission will receive only BGN 80.5 million after the sell off of the bankrupted steel smelter. Bond holders remanded BGN 927.3 million but will receive only 8.6% of their money. First Investment Bank will receive almost BGN 42 million (87.1% of the debt). Salaries and taxes will be paid in full. The smelter will repay a total of BGN 274.5 million. NEK, Bulgargaz and the State Railways have credited Kremikovtzi with BGN 230 million but so far it is unclear whether they will receive anything at all.
Source: Dnevnik (19.07.2011)

Assets of Kremikovtzi sold 26-year-old Lachezar Varnadzhiev, who through his one-man company Eltrade Company bought the production assets of Kremikovtzi, has sold its share. According to the Commercial Register, since July 5 the new owner is the Virgin Islands-registered Bessian Management Limited. Steelmaker was sold at auction on April 12 for BGN 316 million. Varnadzhiev’s decision to sell shares is from June 24. He remains manager of Eltrade Company. According to the information in the Commercial Register, Bessian Management Limited is represented by Bun Secretarial Limited, Cyprus. The new statute of Eltrade Company states that Varnadzhiev has no right to sign deals over BGN 500 alone and to do so, he needs permission from the owner. Day before the transferring of the company, Varnadzhiev pledge in favor of First Investment Bank. The assets of Kremikovtzi is allocated to secure the EUR 59 million loan for the purchase of the plant. The bank explained yesterday that the change of ownership is part of the development of the original structure of the transaction. "As already explained, this is a bridge financing and the change of ownership is part of the originally submitted and approved business plan of Eltrade Company," FIB said and explained that all the requirements of Bulgarian legislation have been met and the owner is clear.
Source: 24 chasa (21.07.2011)

Offshore company acquires Kremikovtzi for BGN 20,000 A company registered in the British Virgin Islands is the new owner of the Kremikovtzi iron and steel works, became clear from a check-up in the Commercial Register. Bessian Management Limited has purchased for BGN 20,000 the Eltrade Company which acquired the bankrupt Kremikovtzi in April 2011. Eltrade Company’s Head, 26-year-old Lachezar Varnadzhiev, paid more than BGN 316 mln for Kremikovtzi’s assets. The money for the purchase was borrowed from First Investment Bank (FIB) and, according to Minister of Economy, Energy and Tourism, Traicho Traikov, the metal recycling company Nadine is behind Eltrade Company. The credit from FIB was extended after assets of Kremikovtzi were pledged as collateral. Varnadzhiev was also the authorised representative of Bessian Management Limited in the recent deal. The offshore company is owned by the Cypriot Bun Secretarial Limited, headed by Lenia Papadopoulou. The deal was signed on July 5 but Varnadzhiev made the decision on it on June 24. At the beginning of this week, it became clear that Kremikovtzi’s former workers will get their overdue wages. A partial account for the repayment of debts was published by Tzvetan Bankov, trustee in bankruptcy of the iron and steel works. It became clear from it that the biggest losers among Kremikovtzi’s creditors are the bondholders, the state-owned National Electric Company and the Bulgarian State Railways.
Source: Class (22.07.2011)

Bulgarian cables and conductors manufacturer Gamakabel will seek to increase by 4.0 million euro a 10 million euro loan from local First Investment Bank, it said on Thursday. The company's shareholders will vote on October 13 on a proposal to seek an increase of the loan while keeping the basic terms unchanged, Gamakabel said in a notice filed with Bulgarian Stock exchange where it is listed. Gamakabel took the loan in 2009 to finance its investment programme and use part of it as working capital.
Source: Dnevnik (02.09.2011)

First Investment Bank JSC - Sofia has appointed Annual general meeting on 29.05.2009. Meeting agenda includes: adoption of the Annual Report for Year 2008, amendments in the statute.
Source: Registry Agency (12.09.2011)

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)

FIB to issue debt securities worth BGN 2 bn First Investment Bank (FIB) will be able to issue debt securities worth up to BGN 2 bn. This will become possible as a result of changes in the Statutes of the Bank, included as the primary issue in the notification for convening of a general meeting of shareholders on October 24, published by the Bulgarian Stock Exchange. The Bank management will issue the debt instruments for a 5-year period. On the question of Klassa daily what necessitated these changes and for what the funds will be used, FIB replied that this was not a new decision, but a deadline extension of an existing decision. The meeting's agenda also includes changes in the Bank Supervision Department. The hitherto members Todor Breshkov, Nedelcho Nedelchev and Kaloyan Ninov will be dismissed from service on January 24, 2012. It was proposed that their vacant posts at the Bank Supervisory Council (BSC) should be occupied by Evgeni Lukanov, Yordan Skorchev and Maya Georgieva. The financial institution indicated that the reason for the reshuffles was the fact that at the beginning of next year the mandate of the hitherto BSC members expires. The general meeting of shareholders will also vote on the actual amount of the remuneration for the members of the Bank Management and Supervisory Board. According to the unconsolidated financial report of the bank for the first six months of the year, its profits increased by 35% on an annual basis up to BGN 20 mln. Its good fiscal performance is mainly due to the growth of BGN 7.09 mln in the net income collected from fees and commissions and as a result of the hike of BGN 21.5 mln of the net interest income. At the last general meeting, the shareholders of the financial institution decided not to pay dividends and to calculate no other deductions from the profits of 2011. In fact, it is already known that FIB financed completely the transaction on the purchase of the bankrupt Kremikovtzi metallurgical plant, providing the amount of BGN 316 mln. FIB was elected as the Best Bank in Bulgaria by the Euromoney magazine and received the prestigious award for market share in the rankings for annual bank awards dubbed Bank of the Year Award 2010.
Source: Class (20.09.2011)

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)

Financial wealth of Bulgarian households up by BGN 4 bn for a year Despite the crisis, the financial wealth of Bulgarian households increased by BGN 4 bn for a year, reaching BGN 41 bn at the end of June, according to an Industry Watch report. Compared to the previous quarter, there is a substantial growth in deposits - by BGN 380 mln and pension savings with BGN 165 mln. The volume of investment in stocks dropped while the amount of investment in mutual funds remain virtually unchanged. Households managed to increase by 3% their savings in the period of a general decline of indebtedness to financial institutions versus the second quarter of 2010. The most significant decrease of 20% per annum was registered in terms of the default to leasing companies, while within the banking system alone, a drop of 1% was registered, specified the experts. Although dwelling prices continue to slump even in 2011, for the first time since the crisis onset, a rise in the scheduled sales and mortgages on a 12-month basis was reported, shows the data. The escalating marketing activity is a signal that over the coming quarters, housing prices will stabilise. In fact, 80% of the assets of the population were invested in dwellings. 68.42% of the people purchase new homes in order to meet their own needs, while 10% of them show the need for a greater area for living, indicated in his turn, George Pavlov, CEO of Address Real Estate company at a seminar organised by the First Investment Bank yesterday. In his words, less than 8% of the people buy real estates to expand their business, while 7.8 and 5% of the clients, respectively, made a dwelling purchase for their relatives and as an investment. According to data of the Yavlena real estate agency, 26% of the realised transactions for the first half of the year were reported in the five largest Bulgarian cities of Sofia, Varna, Plovdiv, Burgas and Stara Zagora. This was a growth of 38% year-on-year, but nevertheless, the concluded purchase and sales contracts remain by 24% less compared to the first six months of 2008.
Source: Class (05.10.2011)

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)

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)