Heavy year ahead of banks, BGN 3.7 bn of assets – written off

Diana Iossifova
Ludmila Kuyumdzhieva

The losses of the Bulgarian banking sector, as a result of written off of assets, due to the recession, will reach about BGN 3.7 bn, or approximately 6 % of GDP 2008, according to UniCredit Group’s latest survey on the banking sector development in Central and Eastern Europe (CEE).
According to Kristofor Pavlov, who presented yesterday part of the analysis focused on the Bulgarian banking sector, these losses would be absorbed in a period of three years, starting from 2009, as the burden of written off debts will be heaviest in 2010. “We believe that a recapitalization of banks on a consolidated level will not be needed with the current losses level in the loan portfolios of the financial institutions,” said Pavlov.
According to Mr. Hampartzoumian, CEO of Unicredit Bulbank, there are preconditions for better state of the economy in the second half of 2010 compared to 2009.
Radka Toncheva, CEO of United Bulgarian Bank commented for Klassa that the forthcoming year would be hard for the banking sector. According to her, everything depends on the development of macroeconomic indicators and how these would impact the economy.
Stoyan Alexandrov, from D Commerce Bank Bulgaria, said that the banking sector would report poor results due to the high interest rates on deposits and tight crediting. He explained that according to recent data, the banking sector’s earnings were down by about 60%, compared to the same period of last year. According to him, the expectations for losses are not surprising.
In the opinion of Tsvetelina Borislavova, Chairman of the Supervisory Board of CIBank, the crisis has not yet fully affected our country and it was unlikely that the losses of the treasuries would be as high as predicted. “The banking sector is stable, the economy is in a different state - the crisis is still ahead of us," said Borislavova, but did not commit herself to specific figures.