Банкеръ Weekly


Bank Shares in Summer Nap

Low liquidity on the Bulgarian Stock Exchange- Sofia in July is continue pulling down the shares of Bulgarian banks. For the third consecutive month prices have continued to lose value. The only exception is again the Corporate Commercial Bank. Concerns of investors are growing due to increasing amounts of bad loans, and declining profits in the banking system.
Shares of public banks in the country lost their image of the most actively traded securities. In July, there was a 45.06 percent decrease in volume of securities traded when 501,620 changed hands against 912,984 in June and 852,832 in May.
The General Meeting of Shareholders in Bulgarian American Credit Bank held on July 5, approved the proposal of the new owner - Ms. Borislavova - to double the bank's capital at a par value of BGN4 per share. On 4 July the bank's share had hit a seasonal high of BGN5.243. The decision of the General Assembly, however, make them plunge to a level of BGN4.109 per share on 14 July. This was a seven-month low for the shares. Concerns of investors about those shares was reinforced by the fact that the peak and the lowest value have shifted further down. These two border prices are the lowest in the vault during the first seven months of 2011.
In several large transactions in July a total of 69,060 shares of the of the Bulgarian American Credit Bank changed hands, against 364,765 in June. For comparison, in May the trading volume was 34,982 shares, and in April it was only 14,119.
The shares of Bulgarian American Credit Bank ended July at a price of BGN4.48 per share, or 82 cents below their quotes at the end of June.
The Bulgarian American Credit Bank posted a loss of BGN14.061 million for the first half of 2011, while for the same period last year its profit was BGN4.201 billion. The main reason for this trend is the depreciation of assets coming to BGN20.3 million in the first six months of this year, and reductions in net interest income (58 percent) as well as lower income from fees and commissions (25 percent) . At the same time administrative costs increased by 4 percent annually.
Shares of the Central Cooperative Bank have continued to decline since the end of June and during the seventh month fluctuated around the level of BGN1.3 per share. Without special reasons on July 11, suddenly investors brightened up and were erady to pay BGN1.369 per share, which remained the highest for the month. The month's bottom was reached on July 22 when bank's shares dropped to BGN1.295 per share. This negative travel continued throughout the 21 trading sessions of the month, closing at BGN1.298 per share. However, it remained below the end-June level of BGN1.309. Naturally, this has weakened the market capitalization of the bank and at the end of July, CCB was worth BGN107.935 million, compared to BGN108.85 million on June 30.
Central Cooperative Bank, however, regained the title of most publicly traded bank on the bourse with a volume of 371,960 shares sold, compared to 286,593 in June and 286,221 in May (the lowest number this year).
In the first half CCB achieved a 6 percent rise in profit, which hit BGN9.069 million. Its net interest income, however, decreased by 6.7 percent (yoy), but income from fees and commissions increased by 7.6 percent. Along with this, the bank's assets added another 33 percent (yoy) to their value and at the end of July already amounted to BGN2.58 billion.
First Investment Bank continued its negative trend from June.
The value of BGN2.925 per share was the lowest for the month - and a 4.07 percent below the peak for these securities.
Interest in the trading in shares of FIB in July fell heavily, and market players exchanged only 58,181 shares. In June, the volume was 251,839 shares, and in May - 530,497.
First Investment Bank showed 35 percent growth in profits year on year to BGN20.003 million in the first half of 2011. Its net interest income increased by 35.5 percent to BGN82 million and net income from fees and commissions was 30 percent higher. Assets of the Bank appreciated by 21 percent higher, reaching BGN5.5 billion.
In July transactions in the shares of Corporate Commercial Bank were concluded very rarely. Trading began at BGN77.01 per share, which remained the lowest for the month. On July 18 the prospects brightened up to BGN 80.6 EUR per share, which in turn was the highest in July.
Interest in shares of the bank still remains weak and in July only 2,419 shares of CCB were sold and bought against 1,190 shares a month earlier and 1,132 shares in May.
For the six months of this year CCB's net profit shrank by 20 percent (yoy) to BGN30.53 million. Income from interests and from fees and commissions, however, increased by 0.78 in 12 percent (yoy) respectively.

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