By: Ekaterina Kirilova, Head of UniCredit Bulbank Marketing and Customer Segments Department

Despite the complicated political and macroeconomic setting in the country, by tailoring its credit products to customer needs and aligning its commercial strategy to the competitive economic environment, UniCredit Bulbank reports a growing market share up to 16.1% in customer loans, thus reaffirming its position as a market leader in lending. The total customer portfolio records a positive annual shift of 0.7% in retail banking. The market share in loans to individuals and households is 13.4%, growing by 0.5% to 17.8% in terms of mortgage loans, while in those two types of loans the market reports a decrease by 0.2%. The ratio of non-performing to total loans before provisions is on the increase in October 2013, compared to the same month a year earlier.

2013 Lending Trends:

• Decrease and convergence of interest rates on BGN and EUR mortgage loans.

• Preserving the trend of increase of the provided BGN mortgage loans against those in EUR.

• Increase of the average loan amount of mortgage loans from 64 000 BGN in 2012 to 67 000 BGN in 2013.

• Preserving the average term of the mortgage loans of 22 years. Having a lower income, a great part of Bulgarian customers prefer long-term loans in order to ease their monthly budget with lower monthly repayment installments.

• Increase of the average amount of consumer loans from 12 500 BGN in 2012 to 14 000 in 2013, as their average term of 8 years is preserved.

• Minimum growth in mortgage loan volumes compared to 2012.

In 2013, customers’ interest to flat interest rate euro loans was lower at the expense of the increasing interest to loans in BGN offering attractive variable interest rates. There is a stable uptrend in the number of real estate deals financed with mortgage loans in 5 of the regional cities – Sofia, Plovdiv, Burgas, Varna and Stara Zagora. The downtrend in the real estate market affects mostly holiday real estates, offices and commercial spaces, while the residential property market enjoys greater interest by the customers. The demand for housing properties in the average price class up to 70 000 euro grows at the expense of the low price segment. There is a slight growth in deals with housing properties in the high price category, i.e. above 150 000 euro. This trend is expected to be preserved in the next year as well.

Nevertheless, people are still more cautious when drawing loans due to the insecure future, the fear of the continuing crisis, the high unemployment rate and the existing probability of income loss.

The trend of decreasing the interest rates on loans will continue in the next year as well, and yet households will remain prudent in taking financial decisions in this environment of slow growth of income, low pensions, high food prices and a passive real estate market.

More information for clients:

UniCredit Bulbank, Call Centre

Phone: 0700 1 84 84

More information for media:

UniCredit Bulbank, Identity & Communications Department

Viktoria Blajeva, Phone: + 359 2 9264 993, wjlj/ebwjepwbAvojdsfejuhspvq/ch

Ekaterina Ancheva, Phone: + 359 2 9264 963, flbufsjob/bodifwbAvojdsfejuhspvq/ch

Magdalena Ivanova, Phone: + 359 2 9232 528, nbhebmfob/jwbopwbAvojdsfejuhspvq/ch