Банкеръ Weekly



Bulgarian banks are gaining bigger and bigger trust among foreign financiers, BNB's statistical data about our country's foreign debt show. For 2005 domestic credit institutions received EUR1.69BN in financing from abroad, or EUR460MN more than in 2004. An interesting detail is that this growth is entirely due to short-term deposits which foreign financial institutions made in Bulgarian banks last year. Their aggregate amount is EUR1.3BN, almost twice than in 2004 when the amount totalled EUR796MN. This interest of foreign financial structures towards deposits in Bulgaria could be explained by two factors. The first one is the stability of domestic credit institutions. This is evident by the fact that in 2005 Bulgarian banks paid EUR1.11BN (up almost EUR900MN from 2004) on short -term deposits of foreign financial institutions.
The second factor is the still high yield offered by Bulgarian banks on short-term deposits in foreign currency. The annual interests on them are higher than in Western Europe and the USA. It is the combination between these two conditions that attracts irresistibly the interest of western financial institutions. Moreover, it increases each year. According to BNB's data about the gross internal debt, the aggregate amount of foreign financial institutions' deposits in Bulgarian financial institutions totalled EUR230.1MN in end-2001, while in end-2005 it reached EUR1.4BN.
Of course, the deposits of foreign finanicial institutions in Bulgaria is not a factor that influences the growth of loans. Bulgarian banks invest that foreign currency in short-term operations, aimed at improving the stability and solvency of our credit institutions.
Regarding long-term loans which our banks got from abroad, they totalled EUR867MN in the end of last year, which is twice the aggregate amount at end-2004. Almost all long-term funds were provided under credit lines and syndicated loans. According to experts, all of them have been invested in the extension of loans, which are almost evenly distributed between corporate clients and representatives of the small and medium-sized business.

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