BANKS' PROFITS INCREASE VERY SLOWLY
Banks' profits rose by BGN31.8MN in July, totalling BGN246.6MN in the end of the month, BGN12MN up year-on-year. This is an insignificant increase, considering that within a year the balance sheet value of credit institutions went up by BGN4.5BN, from BGN14.86BN to BGN19.3BN. The aggregate amount of loans also picked up drastically, from BGN7.3BN to BGN11.1BN. Quite logically, proceeds from interest also rose, from BGN527MN to BGN727MN, marking a 37% increase. This, however, has not resulted in a commensurate profit growth. Within a year it climbed up by only 5 per cent. This result is due to the decreasing efficiency of credit institutions because of the their higher expenses for provisions, salaries, and rents for premises. For the first seven months of 2004 banks spent BGN169MN for remuneration to their employees, up from BGN141MN year-on-year. For the same period costs for rents rose by BGN9MN, and net expenses for provisions - by BGN99MN. According to expectations, by the end of 2004 and in 2005 the efficiency of our bank system will be decreasing and the aggregate amount of the banks' profits could even drop below the 2003 level as the credit institutions will be forced to spend more heavily on the introduction of new info systems and raise salaries in order to keep their qualified personnel.