Банкеръ Weekly


Bulgaria’s Economy Picks Up due to Banks

As much as the locals are prone to pessimism for the development of Bulgaria, an indirect indicator breaks the local economic pessimism, by proving that 2014 was the year of recovery of the country’s real sector. This is the number of transactions in BISERA 6, through which the local currency transfers in the country pass. The data of BORIKA - BANKSERVICE showed that last year 65% of total transactions were carried out in the real economy, and only 35% were from and to the budget. This is serious business growth, given that for many years the ratio was 50:50.

A balance of 65:35 shows almost doubling the prevalence of inter-company payments and this speaks of greater economic activity. It also testifies to the positive effect of regulatory measures such as limiting the cash payments and shrinking the grey economy. This explained exclusively for the BANKER weekly Lubomir Tzekov, CEO of BORIKA - BANKSERVICE while analyzing the annual results of the company. Overall, the number of transfers in local currency last year grew by nearly 11% compared to 2013 which also testifies to the accelerating speed. Regarding amounts of transactions, the corresponding increase is more significant - 12.5%.

Card transactions showed weaker growth. Last year it increased by 4.6%, for which there are certain reasons. According to Lubomir Tzekov one is the takeover over MKB Unionbank by First Investment Bank. Former Hungarian bank had a wide range of card products, which has subsequently been shrunk. Another reason Tzekov sees in revocation of the license of Corporate Commercial Bank. It had many cardholders in certain social niches, including in the social benefits payments. Moreover, when it handled a significant part of the pensions.
The matter in hand about a hundred thousand cards,

said Tzekov.

The increase in the number of transactions through POS (commercial) terminals for 2014, compared with 2013 was quite noticeable - 9%. Much smaller is the growth of transfers over ATMs, which was only 3%. The analysis of this discrepancy shows a specific European trend in Bulgarian banks' customers. This is most clearly illustrated by comparing the average amount withdrawn from the ATM and commercial terminals. In stores the sums steadily decreased: if in 2012 they were 81.40 levs, in 2013 – they dropped to 77.20 lev and in 2014 they were 75.20 levs on average. This, according to Ljubomir Tzekov is good news because it is indicative of a more people using cards, and more often at that, to pay for goods and services and an entire population turning away from cash. This payment method is not only more modern way shopping, but also more secure. Additional attractiveness for it is that it is cheaper, because the transaction is usually free of charge, and if somewhere there is a fee - it does not exceed 20 cents and is usually borne by the trader.

Smarter Bulgarians show another trend – they more rarely stand in front of the ATMs, because they turn out to be drawing increasingly larger amounts. If in 2012 the average amount withdrawn was 147 levs, in 2013 it cam to 153 levs, and then last year it further increased to 161 levs. This is mainly explained by the fact that any withdrawal costs money - about 1 lev on average for all bank cards in the country. Bulgarian cardholders increasingly minimize costs.

BORICA- BANKSERVICE ended 2014 with operating income of 33 million levs, which is 101.3% of the budgeted plan. With costs of 24 million levs, the profit is around 8.9 million levs, which 3% more than planned for the year, announced for the BANKER Lubomir Tzekov.

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