BGN1,200 AVERAGE MONTHLY SALARY IN BANKS
The battle for attracting personnel into the bank sector is not less fierce than the one for clients and market shares. Hiring appropriate officers to work with customers and recruiting managers of departments and directorates, has already become a problem for nearly all domestic banks. Requirements to them become higher and higher each year. The people working in branches should not only be financially literate, but should also have good communication skills, be good-looking, and speak at least one foreign language. It's hard to hire such staff for an average monthly salary of BGN300.Consultants which some of the banks have begun to appoint for work with citizens and smaller firms, who are also supposed to attract new clients, are usually employed against a monthly remuneration of BGN400-500. Some of them, however, say such a salary is quite insufficient for their labour and have decided to get employed in any other bank that offers a monthly remuneration that is BGN100-200 higher.A four-figure salary is necessary in order to attract heads of departments or directorates. Managers of Liquidity, Corporate Clients or Problematic Credits directorates, for instance, are employed against a monthly salary of BGN3,000-plus. Bank officers claim there are rumours that some branches of foreign credit institutions in Bulgaria have offered a monthly remuneration of BGN8,000 in order to handle a segment of their business in this country. Heads of some of the big banks are adamant there is a deficit of well-qualified personnel. A confirmation of that are the announcements for staff recruitment which are always on the credit institutions' websites. That explains the increase of the average salary in bank institutions each year. This fact is clearly seen in the expenditure side of credit institutions. For the first three months of 2005 banks spent BGN80.7MN for salaries and social insurance paymentsThis is in fact the biggest item of expenditures for credit institutions. Moreover, the money for salaries and social insurance payments in the first quarter of this year rose by more than BGN10.4MN as compared to March 2004, and by almost BGN22MN from the first three months of 2003.BNB's statistical data show that during the past four or five years there has been a tendency of increasing the bank sector's expenditures for remuneration and social insurance payments by about BGN10MN a year. And the reason for that is not the drastic increase of personnel in the bank system, but the average salary that is going up under the pressure of competition. It's a fact that almost 22,800 people were employed in the bank system in end-March 2005, or 500 more than in mid-2004.The average amount of banks' expendituresfor salaries and social insurance payments for the first three months of 2005 were BGN1,184 per employee, up BGN70MN from the middle of 2004. But during that period taxes on the incomes of natural persons decreased by 5% on average. After deducting the instalments for natural persons' income tax and insurance payments, the average labour remuneration in the bank sector was about BGN845 in end-March 2005, vs BGN789 net income in mid-2004 when 22,300 were working in the bank sector. Within the same period, however, the work of employees in the credit institutions doubled due to the quick rise of loans. A net average salary of BGN845 per month seems quite a handsome remuneration on the background of the average working wage in Bulgaria, which was BGN309 in end-March according to the National Statistics Institute (NSI). This shows a considerable differentiation between hired labour in the finance and credit sector and in the other sectors, especially concerning the banks which pay high salaries to their employees. E.g. the Sofia branch of the US Citibank spent BGN1,268,000 for salaries and social insurance payments during the first three months of 2005. This makes BGN8,805/month for each employeeThis is a shocking amount, higher than the salaries of a lot of bank executive directors in this country.With the same comments we'll note the high average monthly salaries in the branch of the Dutch ING Bank - Bulgaria - BGN4,100, in Bulgarian-American Credit Bank - BGN3,000, in the French BNP-Paribas (Bulgaria) - BGN3,100, and in the Turkish subsidiary of Trade Bank D - BGN2,300.A curious fact is that the only state-run bank in Bulgaria - Encouragement Bank - also maintains quite a high standard of labour remuneration. It spent BGN480,000 on salaries and social insurance payments for its staff of 88, or BGN1,800 per employee each month. According to this indicator Encouragement Bank is in front of all big and most of the small credit institutions in the country. The average remuneration in most of the banks is in the range of BGN1,100-1,600. In BULBANK, for instance, it is BGN1,400, in United Bulgarian Bank (UBB) - BGN1,200, in HVB Bank Biochim - BGN1,400, in First Investment Bank (FIB) - BGN1,100, in Raiffeisenbank (Bulgaria) - BGN1,400, in Post Bank - BGN1,600, in SG EXPRESSBANK - BGN1,300. DSK Bank has always been in the queue in terms of salaries ever since there has been a private financial market in Bulgaria. Currently, the average remuneration there is BGN950. Although the credit institution was sold to Hungary's OTP in November 2003, its employees remained among the lowest-paid. Managers' remunerationin the various banks differ quite a lot. In most of the credit institutions with a balance sheet value up to BGN500MN executive directors get some BGN6,000-7,000 per month. This amount does not include the bonuses which can reach 30% of the remuneration and are usually paid annually, in the end of November or the beginning of December.Managers of big banks, such as BULBANK, DSK Bank, UBB, HVB Bank Biochim, (FIB), Raiffeisenbank (Bulgaria), Post Bank, SG EXPRESSBANK, DZI Bank, and EIBANK, get much higher salaries. We'll hardly ever know the exact amount an executive director of UBB, BULBANK, or HVB Bank Biochim gets, but the data in auditors' reports of some of them give a general idea about the managers' remunerations. These reports are public and it's not a problem to read them. The BANKER weekly already wrote that the aggregate amount of remunerations, received by the nine-member BoD of UBB in 2004 totalled BGN879,709, or BGN8,145 per person on average. We should right away specify that the three executive directors of the credit institution - Stiliyan Vutev, Radka Toncheva and Christos Katsanis are higher-paid than the other BoD members. BULBANK's auditors' report for 2004, prepared by KPMG Bulgaria, expressly states that the members of the credit institution's management board received a total of BGN1,416,000. In other words, each of the five members got BGN23,600/month. The report on HVB Bank Biochim, which has been also worked out by KPMG Bulgaria, does not include data about the aggregate amount of remunerations, received by the bank's management board. They have been included in the bigger figures of the Deals with Connected People item, pointing to the total amount of sums on current accounts and deposits of companies, connected with the bank, as well as of its staff and managerial team. There is also information about the size of loans, extended by the bank to connected persons and how many credit lines (for instance, from its major owner Bank Austria) it has received from them. According to heads of other big credit institutions, their colleagues from HVB Bank Biochim get monthly salaries in the range of BGN10,000-15,000. Such amounts are believed to be normal remuneration for managers of a profit-making and quickly developing credit institution. In fact, the managers' remuneration is not a problem for the big banks. Their expenses for the purpose will be inevitably going up with the increase of the personnel's salaries. Financial incentives are the most efficient way for banks to keep their skillful professionals from the attempts of the competition to attract them on its side. The battle for staff in banks has just started. This is something which other branches have already experienced.