Bulgaria Banking Sector Analysis

Publication Date	February 2008
Publisher	RNCOS
Product Type	Report
Pages	80
ISBN Number	not applicable
Product Code	RCS00348

Price

£580.00
approximately: $1,002 | €736

PDF

PRINT £695 ($1,200 | €882)

CD-ROM £695 ($1,200 | €882)

Order above formats by FAX

Summary

The reportis an analytical study of the thriving banking industry of the southeastern European country, Bulgaria, by RNCOS. It evaluates the product quality and the services provided by the Bulgarian banking industry. This report helps clients to dissect the leading-edge opportunities critical to the success of the banking industry in the country and detailed data supported with analysis helps investors, financial service providers, and global banking players to navigate through it.

Market Analysis

The demand for banking services has grown as confidence in the sector has gradually returned and incomes increased since 1997. Total assets of the commercial banks rose by 45% in local-currency terms in 2005 and are estimated to have grown by around 23% in 2006. Banks have increased their lending, particularly to households, and have shifted away from their previous pattern of holding large deposits overseas. With the government running a budget surplus since 2003, lending to the private sector has been growing more quickly than total lending. After these increases, loans to the non-financial sector accounted for 66% of deposits in September 2006.

The Bulgarian economy is still mainly cash-oriented, but the use of debit cards is increasing. Credit cards are still not often used in the country, but the expansion of e-commerce and international travel is boosting the demand for this service in the country. Moreover, the creation of a centralized credit-reporting agency in 2004 will make it easier for the banks to offer credit cards to their customers.

Key Findings

Bulgaria is one of the fastest growing countries in Eastern Europe by assets, loans, deposits and profitability of the sector.
Housing mortgage loans is one of the hottest markets for the Bulgarian banking industry and is forecasted to grow at a CAGR of nearly 88% for the period spanning from 2007 to 2010.
The credit card market in Bulgaria is all set to take off in a big way as it has a significant potential for expansion because only 3% of payment transactions are made by credit card.
Point of Sale (POS) Terminals are growing more rapidly as compared to ATMs in Bulgaria.
Among the deposits category, time deposits are anticipated to take lead over other kind of deposits from 2007 to 2010.

Key Issues & Facts

Why Bulgaria is an attractive banking market?
How competitive is the Bulgarian banking industry?
What is hottest market for bank loans?
What kind of deposits are set to boom?
What are the various opportunities and challenges for the industry?
What are the prospective areas of investment for the banks in near future?
Which factors will lead to the growth of payment cards, loans and deposits in Bulgaria?

Key Players

This section provides business overview and key financials of top players operating in the Bulgarian banking industry, including DSK Bank, Bulbank, United Bulgarian Bank (UBB), Raiffeisenbank and First Investment Bank.

Research Methodology Used

Information Sources

Information has been sourced from various authentic sources like books, newspapers, trade journals, and white papers, industry portals, government agencies, trade associations, monitoring industry news and developments, and through access to over 3000 paid databases.

Analysis Methods

The in-depth analysis of the report has been done by using several methods, like ratio analysis, historical trend analysis, and linear regression analysis using software tools, judgmental forecasting and cause and effect analysis.

Content

1. Analyst View
2. Eastern European Banking Industry
- 2.1 By Assets
- 2.2 By Deposits
- 2.3 By Loans
- 2.4 By Income
3. Bulgaria Banking Industry
- 3.1 Overview
- 3.2 Why Bulgaria is an Attractive Banking Market?
  - 3.2.1 Flourishing Real Estate Market
  - 3.2.2 Booming Household Credit Demands
  - 3.2.3 Growing Employment
  - 3.2.4 Rising Disposable Income
  - 3.2.5 Swelling Bankable Households
  - 3.2.6 Surging FDI
  - 3.2.7 EU Accession
  - 3.2.8 Declining Non-performing Loans
- 3.3 Performance
  - 3.3.1 By Products
    - 3.3.1.1 Deposits
    - 3.3.1.1.1 Demand Deposits
    - 3.3.1.1.2 Savings Deposits
    - 3.3.1.1.3 Time Deposits
    - 3.3.1.2 Loans
    - 3.3.1.2.1 Commercialization Loans
    - 3.3.1.2.2 Consumer Loans
    - 3.3.1.2.3 Housing Mortgage Loans
    - 3.3.1.2.4 Agriculture Loans
    - 3.3.1.2.5 Others
    - 3.3.1.3 Payment Cards Market
    - 3.3.1.3.1 Overview
    - 3.3.1.3.2 Leaders in the Card Market
    - 3.3.1.3.3 International vs Domestic Cards
    - 3.3.1.3.4 Credit Cards
    - 3.3.1.3.5 ATM/Debit Cards
  - 3.3.2 By Income
    - 3.3.2.1 Net Interest Income
    - 3.3.2.2 Non-interest Income
- 3.4 Payment Systems
  - 3.4.1 Real Time Gross Settlement System in Bulgaria (RINGS)
- 3.5 Analysis
  - 3.5.1 Sources of Funds
  - 3.5.2 Profitability Analysis
    - 3.5.2.1 Return on Interest Bearing Assets
    - 3.5.2.2 Cost of Interest Bearing Liabilities
    - 3.5.2.3 Net Interest Margin
  - 3.5.3 Ratio Analysis
    - 3.5.3.1 Assets/GDP
    - 3.5.3.2 Loans/GDP
    - 3.5.3.3 Loans/Assets
    - 3.5.3.4 Loans/Deposits
    - 3.5.3.5 Efficiency Ratio
  - 3.5.4 Opportunities
    - 3.5.4.1 Insurance Market
    - 3.5.4.2 Internet & Mobile Banking
    - 3.5.4.3 Consultancy & Outsourcing Market
    - 3.5.4.4 Card Manufacturers
    - 3.5.4.5 ATM & POS Terminals
    - 3.5.4.6 Automobile Industry
    - 3.5.4.7 Property Consultants
    - 3.5.4.8 Consumer Durables Market
  - 3.5.5 Challenges
    - 3.5.5.1 Declining Population
    - 3.5.5.2 Rising Classified Loans
    - 3.5.5.3 ATM & Credit Card Frauds
    - 3.5.5.4 No Co-operation between Banks involved in Card Issuing & Processing
    - 3.5.5.5 Merchants Acquisitions
4. Future Outlook (2007-2010)
- 4.1 Loans
  - 4.1.1 Commercialization Loans
  - 4.1.2 Consumer Loans
  - 4.1.3 Housing Mortgage Loans
  - 4.1.4 Agriculture Loans
- 4.2 Deposits
  - 4.2.1 Demand Deposits
  - 4.2.2 Savings Deposits
  - 4.2.3 Time Deposits
5. Government Regulations
6. Key Players
- 6.1 DSK Bank
- 6.2 Bulbank
- 6.3 United Bulgarian Bank (UBB)
- 6.4 Raiffeisenbank
- 6.5 First Investment Bank
List of Figures:
- Figure 2-1: Eastern Europe - Assets of Banking Industry (in Billion US$), 2001-2006E
- Figure 2-2: Eastern Europe - Deposits of Banking Industry (in Billion US$), 2001-2006E
- Figure 2-3: Eastern Europe - Loans of Banking Industry (in Billion US$), 2001-2006E
- Figure 2-4: Eastern Europe - Net Interest Income of Banking Industry (in Billion US$), 2001-2006E
- Figure 3-1: Bulgaria - Assets of Banking Industry (in Million US$), 2001-2006
- Figure 3-2: Bulgaria - Share of Commercial & Foreign Banks in Assets, Deposits & Net Loans (%), 2006
- Figure 3-3: Bulgaria - Employment (in '000), 2002-2006
- Figure 3-4: Bulgaria - Average Monthly Wages & Salaries (in BGN), 2002-2006
- Figure 3-5: Bulgaria - Disposable Income (in Million US$), 2001-2006E
- Figure 3-6: Bulgaria - Forecast for Disposable Income (in Million US$), 2007-2011
- Figure 3-7: Bulgaria - Number of Bankable Households (in '000), 2001-2006E
- Figure 3-8: Bulgaria - Forecast for Number of Bankable Households (in '000), 2007-2011
- Figure 3-9: Bulgaria - Foreign Direct Investment in Financial Sector (in Million Euro), 2004-2006 & Q3 2007
- Figure 3-10: Bulgaria - Non-performing Loans of Commercial & Foreign Banks (%), 2005 & 2006
- Figure 3-11: Bulgaria - Deposits of Banking Industry (in Million BGN), 2004-2006
- Figure 3-12: Bulgaria - Demand Deposits of Banking Industry (in Million BGN), 2004-2006
- Figure 3-13: Bulgaria - Savings Deposits of Banking Industry (in Million BGN), 2004-2006
- Figure 3-14: Bulgaria - Time Deposits of Banking Industry (in Million BGN), 2004-2006
- Figure 3-15: Bulgaria - Loans of Banking Industry (in Million BGN), 2004-2006
- Figure 3-16: Bulgaria - Credit Structure (%), 2006
- Figure 3-17: Bulgaria - Commercial Loans of Banking Industry (in Million BGN), 2004-2006
- Figure 3-18: Bulgaria - Consumer Loans of Banking Industry (in Million BGN), 2004-2006
- Figure 3-19: Bulgaria - Housing Mortgage Loans of Banking Industry (in Million BGN), 2004-2006
- Figure 3-20: Bulgaria - Agriculture Loans of Banking Industry (in Million BGN), 2004-2006
- Figure 3-21: Bulgaria - Other Loans of Banking Industry (in Million BGN), 2004-2006
- Figure 3-22: Bulgaria - Share of Top Ten Card Issuing Banks (%), 2005
- Figure 3-23: Bulgaria - Net Profit of Banking Industry (in Million BGN), 2005 & 2006
- Figure 3-24: Bulgaria - Net Interest Income of Banking Industry (in Million BGN), 2005 & 2006
- Figure 3-25: Bulgaria - Non-interest Income of Banking Industry (in Million BGN), 2005 & 2006
- Figure 3-26: Bulgaria - Processed Payments under RINGS by Time Interval (in Numbers), Jan 2006 to Dec 2006
- Figure 3-27: Bulgaria - Processed Payments under RINGS by Time Interval (in Million BGN), Jan 2006 to Dec 2006
- Figure 3-28: Bulgaria - Sources of Funds for Banking Industry (%), 2006
- Figure 3-29: Bulgaria - Returns on Interest Bearing Assets (%), 2003-2006
- Figure 3-30: Bulgaria - Cost of Interest Bearing Liabilities (%), 2003-2006
- Figure 3-31: Bulgaria - Net Interest Margin of Banking Industry (%), 2003-2006
- Figure 3-32: Bulgaria - Assets/GDP Ratio of Banking Industry (%), 2000-2006
- Figure 3-33: Bulgaria - Loans/GDP Ratio of Banking Industry (%), 2000-2006
- Figure 3-34: Bulgaria - Loans/Assets Ratio of Banking Industry (%), 2001-2006
- Figure 3-35: Bulgaria - Forecast for Loans/Assets Ratio of Banking Industry (%), 2007-2011
- Figure 3-36: Bulgaria - Loans/Deposits Ratio of Banking Industry (%), 2001-2006
- Figure 3-37: Bulgaria - Forecast for Loans/Deposits Ratio of Banking Industry (%), 2007-2011
- Figure 3-38: Bulgaria - Efficiency Ratio of Banking Industry (%), 2003-2006
- Figure 3-39: Bulgaria - Forecast for Sales of TV Sets & PCs (in '000 Units), 2007-2011
- Figure 3-40: Bulgaria - Population (in Million), 2001-2006E
- Figure 3-41: Bulgaria - Forecast for Population (in Million), 2007-2011
- Figure 3-42: Bulgaria - Share of Consumer Classified Loans in Total Classified Loans (%), Q4 2004 to Q3 2006
- Figure 3-43: Bulgaria - Share of Classified Housing Mortgage Loans to Individuals in Total Classified Loans (%), Q4 2004 to Q3 2006
- Figure 4-1: Bulgaria - Forecast for Commercial Loans of Banking Industry (in Million BGN), 2007-2010
- Figure 4-2: Bulgaria - Forecast for Consumer Loans of Banking Industry (in Million BGN), 2007-2010
- Figure 4-3: Bulgaria - Forecast for Housing Mortgage Loans of Banking Industry (in Million BGN), 2007-2010
- Figure 4-4: Bulgaria - Forecast for Agriculture Loans of Banking Industry (in Million BGN), 2007-2010
- Figure 4-5: Bulgaria - Forecast for Demand Deposits of Banking Industry (in Million BGN), 2007-2010
- Figure 4-6: Bulgaria - Forecast for Savings Deposits of Banking Industry (in Million BGN), 2007-2010
- Figure 4-7: Bulgaria - Forecast for Time Deposits of Banking Industry (in Million BGN), 2007-2010
- Figure 6-1: Bulgaria - Share of Five Largest Banks (%), Mar 2007
List of Tables:
- Table 2-1: Eastern Europe - Assets of Banking Industry by Country (in Million US$), 2006E
- Table 2-2: Eastern Europe - Deposits of Banking Industry by Country (in Million US$), 2006E
- Table 2-3: Eastern Europe - Loans of Banking Industry by Country (in Million US$), 2006E
- Table 2-4: Eastern Europe - Net Interest Income of Banking Industry by Country (in Million US$), 2006E
- Table 6-1: DSK Bank - Key Financials (in Million BGN), 2004-2006
- Table 6-2: Bulbank - Key Financials (in '000 BGN), 2004-2006
- Table 6-3: United Bulgarian Bank - Key Financials (in '000 BGN), 2004-2006
- Table 6-4: Raiffeisenbank - Key Financials (in Million Euro), 2005 & 2006
- Table 6-5: First Investment Bank - Key Financials (in '000 BGN), 2006 & Sep 2007