Bulgarian banking sector continues to be among the most stable ones in EU
A bit of optimism and faith in one’s abilities is what Bulgarians need at a time when the economy is overcoming the crisis, while citizens are not convinced yet that the growth would be stable. This is what the analysis of Ognyan Donev, chairman of the Confederation of Employers and Industrialists in Bulgaria, shows. He hopes that in 2011 the economic growth would reach 4%. Are the banks ready to back this growth and what is the situation of the banking sector? Is Bulgaria actually overcoming the crisis? These were just some of the topics discussed by Bulgarian and foreign high-level bankers at a forum dedicated to Bulgarian banks and business overcoming the crisis.
Banks are the vascular system of economy and that is why we must follow the trends, Governor of the Bulgarian National Bank, Ivan Iskrov, said. Thanks to export Bulgaria now shows results characteristic of export-oriented economies like Germany and other smaller countries. There is growth in investments and macroeconomic stability, provided by the work of several successive governments and a stable banking sector. Mr. Iskrov quoted a report by renowned US economist and former Deputy Director of the IMF Stanley Fisher, who points out that Central and Eastern Europe was less affected by the crisis, thanks to stable banking sectors. This turns out to be a key factor when it comes to the amount of troubles caused by the world economic and financial crisis.
What is the condition of the Bulgarian banking system today?
“It continues to show versatility and effectiveness on its way out of the crisis,” Ivan Iskrov says. “Citizen’s deposits continue to grow, which demonstrates trust in the system. Despite the increase of bad loans, which reached nearly 13% in March 2011, the banking sector has enough reserved potential. The banking system has a capital of more than 5 billion euro, while 2.5 billion euro make sure that bad loans can cause no damage to the system. There are no weak banks in Bulgaria. The Bulgarian banking sector continues to be among the best in the EU.”
The banking system usually reflects the actual economy, where there is no much enthusiasm. This is actually the situation in the whole world, Levon Hampartsumyan, Chairman of the Association of Commercial Banks said. The Greek crisis affects Bulgaria, as the countries are connected economically and that was why decisions that could improve the situation in Greece would also positively affect Bulgaria. Answering a question about the high level of loan interest rates in Bulgaria, Mr. Hampartsumyan said the levels were comparable to these in the Baltic countries and a number of countries in Central and Eastern Europe, including Greece and Serbia.
The banker said the commercial policy of the banks was not a setback for the development of the economy.
“Actually interest rates also reflect the situation of the economy and any attempts to regulate interest rates by administrative measures would be futile. I can say that banks are showing rational behaviour and have enough capital to support entrepreneurship and the desire of all people to live better lives”, Levon Hampartsumyan said in conclusion.
Source and photo: www.bnr.bg
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