Bulgarian Banks to Prevail over Foreign Ones - Report

The top bank in Bulgaria - UniCredit Bulbank is owned by Italy's UniCredit. File photo

Bulgarian banks will shift the market from foreign capital banks, and will push the latter out, according to estimates of UniCredit Bulbank.

Banks with Bulgarian capital would have greater and greater influence, while treasuries with foreign participation, which in 2009 secured 84% market share in assets, then conceded to 77% in 2011, will shrink to 75% this year, UniCredit Bulbank, which is owned by Italy's UniCredit forecasts, the Bulgarian "Sega" (Now) daily reports, pointing out this shift is not a surprise and follows a 3-year trend.

In November 2011, for the first time a Bulgarian bank ranked among the largest ones. First Investment was ranked fifth and topped the previously fifth Greek Post Bank. The top five are - UniCredit Bulbank, DSK Bank, United Bulgarian Bank, UBB, Raiffeisen Bank, and First Investment Bank, FIB.

Post Bank remains sixth, but Corporate Commercial Bank, CCB, where businessman, Tzvetan Vassilev, partners with an Oman Fund (30% of the shares) is very close behind and advancing quickly.

Shifts also occurred on lower levels - International Asset Bank, seen as having Bulgarian owners, has surpassed the Bulgarian-American Credit Bank.

Central Cooperative Bank, linked to the shady Varna group TIM, is entirely Bulgarian-owned and ranks 10th, while the Central Bank, BNB is 14th. Investbank, Municipal Bank, and Texim Bank are also Bulgarian-owned. It is expected that in 2012, these banks will take over 25% of the granted loans and of other receivables.

Furthermore, the share of foreign banks declined, and in 2012 for the first time the top five in Bulgaria will fall below 50% of assets in the system.

"This happens mainly because of Greek banks," Cristophor Pavlov, Chief Economist at UniCredit Bulbank, told Investor.bg.

"This process is neither new nor surprising. Last spring, for example, assets of banks with Greek capital in the country decreased by 1.2 billion, or 6%, in three months," he says.

According to BNB there is no reason for alarm over capital exodus from Bulgaria.

"When on the local level there is insufficient effective demand, it does not make sense for banks to hold large credit lines, so it is normal to return part of the attracted borrowings to their headquarters," recently said the Central Bank Chief, Ivan Iskrov.

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