Bulgarian banking sector’s ability to resist external shocks will continue to improve this year;

Banks are focusing their efforts on the improvement of lending conditions.

It will take more time for the demand for new loans to be back to normal, especially with regard to the household sector. This was what Kristofor Pavlov, Chief Economist of UniCredit Bulbank, said at the forum “The Sound of Money”, organized by profit.bg. This is caused by the high unemployment and uncertainty as well as the increased social and political turbulence. These two factors have an impact on the consumption even of households which in general can afford to spend more.

“It will also take few more years for the financial indebtedness of the corporate sector to be reduced in order to be back to its normal level,” said Kristofor Pavlov. He pointed out that the financial restructuring of companies experiencing difficulties is still very slow.

At the same time not all losses resulting from the real estate bubble burst and the 2009 recession have been absorbed. This will continue to maintain depreciation costs at high levels at least for the next three-four years in a row.

“We are optimistic that this year interests will continue to decrease and expectations are for a higher decrease in the interests for households than the ones for the business,” added Kristofor Pavlov at the forum. He also made the point that the predictable environment is important for a recovering economy and that is why the business expects that the new government will work for maintaining the economic stability and the stability of public finances.

At the same time banks are gradually focusing their efforts on the improvement of lending conditions for companies and households. Kristofor Pavlov has explained that this is the logical path for credit institutions to follow after the gradual improvement of their operating results.

“Despite the crisis in Cyprus and Slovenia the process of normalizing deposit interest rates will continue,” said the chief economist of UniCredit Bulbank. This clearly indicates that the Bulgarian banking sector’s ability to resist external shocks continues to improve this year. The economic environment, however, is still characterized by significant risks.

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