Deposits in Bulgaria Banks Hit New Record High

The largest increase in deposits in Bulgaria during the last quarter of 2011 coincided with growing concerns over the economic situation in the eurozone. File photo

Banks in Bulgaria continue to record steady growth in deposits, a trend which has been gaining momentum throughout last year, official data shows.

The deposits of citizens in local banks increased by BGN 393 M only in January 2012, nearly two times more over the same period the previous year, according to data of the central bank BNB.

Thus the total amount of deposits of citizens hit a record-high BGN 32.3 B at the end of January 2012, marking an annual increase by 14.37%.

From October to December 2011 deposits increased by BGN 1.4 B, which was the largest growth compared to the previous quarters and coincided with growing concerns over the economic situation in the eurozone.

The deposits of companies and state institutions in local banks increased by BGN 452 M in January 2012 and towered to the record-high BGN 21.4 B, up by BGN 1.9 B over a year ago.

The central bank however provided no break-down of the figures into Bulgarian and foreign-owned accounts.

There has been recently a noticeable trend among Greek and Romanian citizens and businesses, who prefer to open deposit accounts in Bulgarian banks, bankers have commented.

The Bulgarian banks stability and their more attractive interest rate policy are the main reasons for the interest of Greek and Romanian citizens and companies, according to the bankers.

Meanwhile a survey has shown that over the last five years only 45% of Bulgaria's population disposed of sufficient incomes to be able to put aside regular savings, predominantly small sums of BGN 100 per month.

A recent analysis by Bulgaria's biggest bank UniCredit Bulbank showed an interesting trend – in times of crisis people with larger deposits tend to increase the amounts in the bank accounts, while those with smaller savings have them downloaded.

Moreover, it appeared that over two thirds of the money deposited in banks are in the hands of just 5% of the households in the country.

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