Bulgarian Banking System 'Stable, Well-Managed'

Bulgarian central bank head Iskrov (right) hands his annual report to Parliament Chair Tsetska Tsacheva. Photo by BGNES

Bulgaria’s banking system is stable and is doing well in a time of global financial turbulence, stated the Governor of the Bulgarian National Bank, Ivan Iskrov.

Iskrov submitted to Parliament Thursday the report of the central bank for 2009, which he handed personally to Parliament Chair Tsetska Tsacheva.

“Banks in Bulgaria are stable including because of the fact that their interest policies for credits and deposits have been governed the right way. I have said many times that a large part of the credit price includes the so called credit risk, which related to the respective credit portfolio,” stated Iskrov.

“There has been a trend since September-October 2009 to see a reduction of the credit and deposit interest rates. This is a slow process which also depends on the international financial markets,” he explained.

“I am positively surprised by the interest expressed by Parliament Chair, Mrs. Tsacheva, regarding the matters that we discussed today such as the financial stability of the country and the international markets,” the BNB Governor mentioned.

He made it clear that the central was contributing BGN 354 M back to the state budget as a result of its activity in 2009.

“Today is a good day for the Finance Minister as well – it is not unimportant at all that the BNB is among the largest taxpayers in the country. We have contributed BGN 354 M to the state budget for 2010. Last year we contributed about BGN 400 M but let’s not forget that 2009 was harder in terms of finances. According to the 2010 State Budget Act, we were supposed to give the state budget BGN 300 M but we managed to generate additional BGN 54 M, which 18% more. The BNB did not lose a single lev in 2009 despite the turbulence of the international financial markets,” elaborated Iskrov after his meeting with the Chair of the Bulgarian Parliament.

He also stressed that the reserves of the Bulgarian central bank are governed at a very high liquidity rate, and at a low risk because of the requirements of the currency peg; Iskrov pointed out that the BNB is among the high-liquidity institutions compared to the other central banks in Europe.

“The state budget has got to be kept under control with as low a deficit as possible. The banking system is Bulgaria is developing extremely well given what is happening in Europe and around the world. Regardless of the fact that we operate in a state of crisis, our banks manage to keep under control the increase of the non-performing loans, there are sufficient resources for that, and some of the banks are even increasing their capital base compared to the end of 2009,” explained the BNB Governor.

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