During the fourth quarter of 2010, the average monthly salary in Bulgaria went up by 4.9% compared to the third quarter, to reach BGN 669.

The data was released Friday by the National Statistics Institute (NSI).

The average salary in October, November and December was BGN 650, 667 and 691 respectively.

The highest increases were registered in Education (13%), Financial Services (10%) while the salaries went down the most in Administration (1%) and the Mining Sector (0.1%).

During the fourth quarter of 2010, the average monthly salary was up over 10% compared to the same quarter of the 2009.

In the last 3 months of 2010, the highest average monthly salaries were registered in the Financial Services Sector BGN – 1 147; followed by the Energy Sector – BGN 1 412, and the Information and Communications Sector – BGN 1 308.

The monthly salaries were the lowest in the Hotel and Restaurant Sector – BGN 432 and the Administration Sector – BGN 437.

On annual basis, the average monthly salary in the last quarter of 2010 was up 6% in the public sector and 13% in the private one.

In December 2010, the number of employed people was down by 50 000 or 2.3% compared to September 2010. The most reductions of staff were registered in seasonal activities such as hotel services, farming and construction.

On annual basis, in December 2010, the number of employed was down by 106 000 people or nearly 5%.

In the recent months the banks’ advertisements of high interest rates on deposits are giving way to an increasing number of ads promoting mortgage loans again.

The first time steps towards lower interest rates on mortgages was in late 2009, although there were only a few scattered cases. Since the start of 2010, however, the trend has grown stronger, with several lenders launching big campaigns to promote mortgages, with more expected to join in soon.

“The last time we saw such a widespread change was in October 2008, at the start of the crisis. Happily, this time the widespread corrections are in a positive direction,” finance consultancy website moitepari.bg said in its latest monthly overview of the banking sector.

The return of large numbers in bank ads is especially visible now, after a half-year hiatus since the previous occasion such a visual focus on the interest rate was last seen in bank advertising, although at the time the subject matter were deposits.

The active media campaign is clearly yielding results, with finance consultancy firms reporting increased interest from consumers. “The number of inquiries is rising, with customers attracted by the numbers in ads, which are on par with those from before the crisis,” the executive director of consultants Credit Center, Tihomir Toshev, said.

It is always a good idea to check for how long the advertised rate is valid – in most cases, that is an initial period of six months to two years, after which the interest rate becomes a floating one.

To take one example, Piraeus Bank’s mortgage loan offer carries an interest rate of 4.35 per cent for loans in euro and 4.75 per cent for loans in leva for the first six months, after which it becomes a floating rate, currently at 8.7 per cent and 9.5 per cent, respectively.

Emporiki Bank offers loans in euro with a fixed interest of 7.9 per cent for the first year, followed by a floating rate calculated at 3.45 percentage points over the bank’s basis interest rate, set at 5.5 per cent for March. Alternatively, customers can choose to pay a floating interest rate throughout, set at 3.25 percentage points over the bank’s basis interest rate, which can change in the future.

A similar offer from Unicredit Bulbank, targeting first-time home buyers, offers a fixed interest rate of 6.15 per cent for the first year and a floating rate for the rest of the period, based on the Sofibor interbank interest rate for a loan in leva or Euribor interbank interest rate for a loan in euro (8.15 per cent if you are taking a 10-year mortgage).

Alternatively, customers can choose a floating rate for the entire period (7.75 per cent for a 10-year mortgage in euro).
In some cases, the lower interest for the initial period is conditional on acceptance of other terms, such as having your salary paid to an account at the bank or use of other products from the bank’s portfolio.

For example, Postbank offers a preferential 7.35 per cent interest rate on its euro-denominated mortgage loan to customers that have their salaries paid to an account at the bank. The interest rate for the rest of the loan’s maturity is floating, now at 8.2 per cent. MKB Unionbank customers can get a lower interest rate on their mortgage if they use a bank package that offers a current account, a credit card and online banking, among other services. The difference is between 8.5 per cent for leva-denominated mortgages and 7.4 per cent for mortgages in euro with the Comfort+ package, and 10.6 per cent and 9.5 per cent, respectively, for the stand-alone mortgage.

Credit rating agency Moody’s Investors Service said on March 8 that the credit outlook for the Bulgarian banking system was negative, primarily reflecting the adverse impact of the domestic economic recession on the credit quality and net profits of the country’s banks.

Moody’s said that the opinion was not a projection of rating changes, rather the credit agency’s view on the likely future direction of fundamental credit conditions in the industry over the next 12 to 18 months.

“Following several years of strong economic growth, the Bulgarian economy was significantly affected by the global economic and financial crisis and entered recession in 2009. From the end of 2008, credit activity started to slow down, largely as a result of sluggish credit demand, the more cautious lending practices adopted by credit institutions and tighter financing conditions both domestically and in the international markets,” Moody’s analyst Elena Panayiotou said in a statement.

Negative trends in Bulgaria’s banking industry, which showed on the lenders’ bottom-line profitability in 2009, would continue over the next 12 to 18 months, Moody’s said.

“We recognise that the banking system remains adequately profitable and has strong capital buffers that were built up during the good macroeconomic conditions in light of the prudent regulation adopted by the Bulgarian National Bank. Hence, the larger and higher-rated banks typically have strong capital levels and a high loss-absorption capacity,” Panayiotou said.

Nevertheless, the system’s non-performing loans grew at a very rapid pace during 2009, resulting in high provisioning expenses and reduced net profitability for most banks.

Bulgarian banks improved risk management systems and procedures as a result of predominantly foreign ownership, but the downturn would test such systems, Moody’s said, given that foreign parent banks could provide only incremental support for their subsidiaries because of problems in their own domestic markets. The cost of support would also be high because of the inherent risks of the Bulgarian market.

“As regards profitability, on the one hand, we expect revenue generation to be constrained by low growth in business volumes, despite good interest rate margins, while net profitability will continue to be affected by elevated provisioning expenses. On the other hand, we expect managements’ efforts to rationalise the banks’ operations and rein in costs to partly alleviate the pressure on profits,” Panayiotou said.

Moody’s viewed the borrower risk concentration in some banks’ loan portfolios as giving rise to particular concerns with regard to increased credit losses in case of some corporate defaults. Going forward, the rating agency said that the modest recovery in the economy in 2010 and expectations of a continued rise in unemployment levels suggested that delinquencies will continue to grow, albeit at a slower pace.
Original source or article: The Sofia Echo

Piraeus Bank Bulgaria cuts by half the interest rate of Miracle mortgages for the first six months of the loan and introduces one year grace period on the principal.

Half Payments – For the first half year of the loan, the interest rate is fixed to 4.35% for loans in Euro and to 4.75% for loans in leva. The standard interest rate for the remaining period currently is 8.70% for Euro and 9.50% for leva. The maximum amount of the loan remains up to BGN 240 000 or the equivalent in Euro. The maximum repayment periods are one of the longest on the market – up to 30 years for leva loans and up to 25 years for Euro.

Promo interest rate for the first 6 months of the loan term:

• 4,35% for EUR loans
• 4,75% for BGN loans

For remaining period: 8,7% for EUR loans and 9,5% for BGN loans.

“In the first months after buying a new house, the clients need additional funds for furniture or some improvements and repairs. This is the reason we to decide to support them with “one year principal vacation” and decreased payments for the first six months”, Mr. Athanasios Koutsopoulos, CEO of the bank shares.

Flexible offer

Miracle loan could be used for purchase of a new house, repairs of an existing one or finishing works of a house that clients already acquired. The loans are repaid with annuity installments that give them the comfort to plan in long-term their financial obligations.

Additional bonuses

Together with Miracle loan, the clients of Piraeus Bank receive for free Piraeus daily banking package – savings account Piraeus Fair Play, debit card Visa Electron without annual fee and Internet banking.

Promotional Housing Loan Miracle

Miracles do happen !

Amount:

•  Maximum 240 000 BGN or the equivalence in EUR;
•  Up to 70% of the market value of the property, depending on the loan purpose
•  Up to 50% of the property market value for panel constructions

Purpose of Loan:

•  Purchase
•  Repair and finishing works
•  Combined purpose

Period:

•  up to 30 years for loan in BGN for loan for purchase;
•  up to 25 years for loan in EUR for loan for purchase;
•  up to 20 years for loan for Repair and finishing works in BGN and up to 15 years for loans in EUR;
•  up to 10 year for loan for Repair and finishing works.

Grace period – promotional housing loan Miracle is granted with 12 months grace period on principal at the beginning of the loan

Collateral: First mortgage in favor of the bank

Interest Rates:

Currency	BGN	EUR
Interest rate
for the first 6 months	4.75%	4.35%
For the remaining period*	9.50%	8.70%

*The interest rate of the loan after the expiration of the promotional period is formed from the Base Interest Rate and a spread. Actual value of the Base Interest rate of the bank for loans in BGN is 7.50% and for EUR is 5.75%.

Loan repayment: annuity installments

Fees and Commissions:

•  Application processing fee – 50 leva;
•  Administrative service fees: 
  – 1.25% one time payment on granting of credit;
  – 0,065% of approved amount – monthly management fee
•  Early redemption fee with: 
  – own resources: 2% of the early redeemed sum; 
  – funds, borrowed from other banks: 5% of the early redeemed sum for the first 5 years of the credit and 2% after the first 5 years.

Requirements for Loan receiver

•  up to 70 years at the end of the credit period 
•  Salary transfer into account opened in PBB required 
•  Residual income on member of family after deduction of monthly payment
  400 BGN per working adult
  360 BGN per non-working adult
  300 BGN per child 7 to 18 y.o.
  200 BGN per child up to 6 y.o.

Insurance: Mandatory Property and Life insurance

ACR – 10,00% for housing loan with amount of EUR 50 000, loan term 20 years, of which 12 months grace period on the principal in the beginning of the loan, 4,35% interest rate for the first 6 months and 8.7% for remaining period for loans in EUR.

Offer validation – Promotional offer is valid for new applications for Promotional housing loan Miracle submitted in the period 04.03.2010 – 03.09.2010 .

More information about the Miracle Mortgage on Piraeus bank.

Bulgarians affected by the financial crunch have doubled over the past year and therefore expect a noticeable change in their consumption habits. This shows the second consecutive survey of marketing research agency Pragmatica among the 800 people in the country.

Approximately 60% of participants in the survey conducted in early 2010, say they feel tangible impact of the crisis on their lifestyles. For comparison – in the beginning of last year, only about 32 percent of Bulgarians say they are feeling the impact of the crisis, explain the agency in its official release.
Respectively the expecttions out of this crisis remain pessimistic. One in five believes that the outcome will be the end of 2010 and in 2011, however the same percent of people doesn’t have a clear vision when it will happen.

As a result of the crisis consumer habits of the Bulgarians are changing. They dropped their expences for certain types of goods and have become more cautious with respect to other goods and have limited the full consumption of third products.

“Consumers are seeking more aggressively for otions to optimise their budget and need more serious reasons why to choose a specific product category and brand,” commented Julian Dobrev, research director in the “Pragmatica” in the official release of the agency.

The study shows that the majority of people have a decrease in their disposable income, as every third family has reduced heating costs, electricity, food and water. Accordingly, the agency forecast that further decrease of consumption can be expected this year.

In everyday goods, there will be little change in the pattern of use of some of them at the other – switching to cheaper solutions, but with a third – a sharp contraction, including cessation of use, writing from “pragmatist.”

There will be no significant changes in consumption of the commodity (bread, eggs, yoghurt, mineral water, sanitary materials). There will be shifting to cheaper alternatives to products such as detergents and in various types of confectionery and alcoholic drinks will have a noticeable contraction in consumption, estimated by the agency.

There is also a substantial change in purchases of home appliances, recreation and holidays. Deferred purchases forom 2009 may not carry in 2010 and except such purchases of air conditioners, computers, televisions, refrigerators, washing machines and cookers.

At the beginning of 2009 nearly 51% of people planned to spend their summer holiday in the country but nearly only 35.5% were able to do this. Missed plans have have impact on planning holidays for 2010 too – only 24% of Bulgarians intend to spend their holiday on the Black Sea. Over the next ten or twelve months the agency expect a decline in the purchases of new or used cars and cutting the expences of the Bulgarisns for going out.

Monetary and financial indicators – Bulgaria 2010

SOFIBOR (3 months)
2006	2007	2008	June-09	July-09	Aug-09	Sept-09	Oct-09	Nov-09
3.69	4.90	7.14	5.94	5.69	5.30	5.11	4.84	4.80
index

М3
2006	2007	2008	June-09	July-09	Aug-09	Sept-09	Oct-09	Nov-09
26.9	31.2	8.8	3.6	1.7	1.0	1.6	4.4	6.4
yoy % ch.

Credit to Non-financial Corporations and Households
2006	2007	2008	June-09	July-09	Aug-09	Sept-09	Oct-09	Nov-09
23.7	63.7	32.5	11.2	7.6	5.4	5.0	3.9	3.7
yoy % ch.

Exchange rate USD/BGN
2006	2007	2008	June-09	July-09	Aug-09	Sept-09	Oct-09	Nov-09
1.56	1.43	1.34	1.40	1.39	1.37	1.34	1.32	1.31
value

Nominal effective exchange rate
2006	2007	2008	June-09	July-09	Aug-09	Sept-09	Oct-09	Nov-09
126.4	127.5	131.2	133.0	132.9	133.4	134.1	134.3
index

What is:

SOFIBOR	Three-month interbank market index SOFIBOR (SOFIBOR: Sofia Interbank Offered Rate is a fixing of the quotations for unsecured BGN deposits offered in the Bulgarian interbank market)
М3	Growth rate compared to the same period of the previous year (monthly value: value at the end of the month)
Credit to Non-financial Corporations and Households   and NPISHs (loans)	Growth rate compared to the same period of the previous year (monthly value: value at the end of   the month)
Exchange rate USD/BGN	Period averages
Nominal effective exchange rate	Index (June 1997=100)

In November 2009 the three-month interbank market index SOFIBOR decreased from 4.84 to 4.80% compared to the previous month, whereas the value in November 2008 was 7.89%.




The annual growth rate of the broad money (monetary aggregate M3) was 6.4% in November 2009 against 4.4% in October, as at the end of November M3 amounted to BGN 46.761 billion (71.4% of the projected GDP for 2009) against BGN 46.554 billion in October (71.1% of GDP). The narrow money M1 amounted to BGN 17.738 billion as it decreased by 7.8% annually against a drop of 12.3% in October.




In November 2009 the volume of the loans to nonfinancial corporations, households and NPISHs amounted to BGN 50.054 billion (76.4% of the projected GDP for 2009), as their annual increase was by 3.7% against 3.9% in October 2009. The annual growth rate of the loans to non-financial corporations in November was 2.0% against 2.6% in the previous month and that of the loans to the households and NPISHs – 6.6% in November compared to 6.1% in October.




In November 2009 the exchange rate BGN against the US dollar decreased in comparison with the previous month from 1.32 to 1.31.

Bulgaria’s gross domestic product (GDP) marks downturn with 3.5% in the first quarter of this year compared to the same period of 2008, show preliminary data from the national statistics.

In the first quarter of this year the Bulgarian economy has shrank with 5% compared to the previous three months. According to the statistical data this is the second successive quarter in which the GDP marks a downturn compared to the previous three months, which means that Bulgaria can be defined as being in recession.

The GDP of Bulgaria for the first quarter of 2009 is BGN 13 961 Mio (EUR 7 138 Mio) according to current prices.

The created by the economic sectors gross added value accounts for BGN 11 606 Mio according to current prices. Re-calculated in comparable prices the added value reduces with 2.8 % compared to the respective period in the previous year.

The industrial sector reduces its relative share in the added value of the economy compared to the first quarter of 2008 and reaches 31.1% in the first quarter of 2009.

The relative share of the added value, realized from activities in the field of services is 64.9%, which is with 1.7% points more than the respective period in 2008.

The relative share of the agricultural sector in the added value of the economy decreases with 0.7% points and reaches 4% in the first quarter of 2009.

The changes in the structural shares are determined by the actual increase of the added value of the service sector 2.5%, while the added value, created by the industrial and agricultural sectors marks a downturn respectively with 12.4% and 4.8% compared to the same quarter in 2008.

81.7% of the produced GDP has been spent for individual consumption in the first quarter of 2009.

The actual reduction is 6% compared to the respective quarter of 2008. The index of the physical volume of the investments 85.9% determines a relative share of this category from 25.9% of the produced GDP. The external balance of goods and services is negative. The import of goods and services surpasses with 2382 million BGN the value volume of the export. For this period the volume of the external turnover has decreased with 21%. The export of goods and services has decreased with 17.4% while the reduction in the import of goods and services compared to the respective quarter in 2008 is 21.1%.
Original source: news.bg

The interest rates in retail bank deposits ended the last year (2009) with decrease. The deposit expansion in both volume and interest rates on the Bulgarian retail market seems to have come to an end. Deposit interest rates are falling since the middle of 2009 from 8.16% in the beginning of the year to 7.5% in December (both market average for BGN deposits). The interest rates for EUR deposits are respectively dropping from 6.31% to 6.16%.
On the other side the interest rates on mortgages and other loans are sending mixed signals on a month to month basis (December to November 2009). Mortgage rates in BGN are rising with 0.58% to 9.72% while the interest rates in EUR are falling to 8.72%. The bank lending rates are slightly decreased to 13.54%. Banks’ commercial lending rates (up to 1 Mio. EUR) are getting more expensive resp. to 10.93% и 9.34% for BGN and EUR. For amounts over 1 Mio EUR lending rates in EUR are increasing to 7.69% and dropping to 8.16% in BGN.

According to Postbank’s leading manager the mortgage rates in BGN are not representative because the demand for home mortgages is mainly in EUR. According to him Bulgaria is still in the beginning of the process of decreasing deposit rates. A decrease in deposit rates would also take the pressure on the lending rates, he says.
Despite the falling interest rates on retail deposits the Bulgarian are increasing their savings, according to Raiffeisenbank. The savings of Bulgarian households in November 2009 are BGN 24 Bio, this is an increase of 7% according to the BGN 22.5 Bio in January 2009. The Raiffeisenbank study shows that the Bulgarians are shifting their short term deposits (one to three months) to loner ones (12 months). Thus the volume of deposits in Raiffeisenbank hasn’t been changed in 2009 – this means that the bank didn’t manage to attract new resources. The bank says the more and more clients are using their online banking proffered for its convenience.
Accordind to UnicreditBulbankk the deposits in Bulgaria will continue to rise with an average rate of about 6.3% p.a. for the next two year. The mortgages will rise with an average of 5.3% p.a.

Promotion terms for the bank’s 3-, 6- and 12-month deposit products are valid by 12 February 2010

Raiffeisenbank has extended the promotional campaign on its deposits till12 February 2010. Promotional interest rates are valid for newly opened 3-, 6- and 12-month deposits in Bulgarian levs, euro and US dollars.

The minimum amount for opening a term deposit is BGN 100, EUR 100 or USD 100. Promotional terms apply to new deposits opened during the promotion and are valid for the first deposit period.

Promotional deposits, as well as Raiffeisenbank’s Deposit 3+3, can be opened on the Internet by means of the bank’s online banking service, which also allows for a daily monitoring of the accumulated deposit interests. The security of using Raiffeisen Online is guaranteed by the Token device, the standard login identification and the bank’s free digital certificate.

The funds deposited with Raiffeisenbank (Bulgaria) are guaranteed by the bank’s participation in the Bulgarian Deposit Insurance Fund.

Read the origin on Raiffeisenbank.