Банкеръ Weekly



FINANCIAL AEROBATICS IN THE ORBIT OF A CURRENCY BOARD ARRANGEMENT For the ninth time the BANKER weekly conferred its Banker of the Year prizes. The awards, as we have always explained, are granted for the personal qualities and skills, shown by the bank managers in 2001. And here is something else which even the world-famous rating agency Standard Poors always says in such cases: We are not an auditor and we can change our opinion at any time.We are stressing this because the BANKER weekly is not an auditor, paid by the banks for establish on the spot if there are lapses in their operation or balance sheets. The BANKER is not even a public judge, pretending to govern truth in the past and future.The local bank system underwent heavy times. It experienced bankruptcy and privatisation, as well as thousands of reproaches and changes. The number of Bulgarian banks dropped considerably, but the capable bank managers heading them did not decrease. And this is not our belief only.Winning the trust of big foreign banks, convincing them of the advantage to extend huge finances to Bulgarian banks, negotiating advantageous terms with them, using successfully the received money and paying it back, and posting a profit - these are operations, evaluated highly all over the world. For a fourth year a lady is carrying out successfully this kind of deals, proving her professionalism.She is experienced in both private and centralized banking. She worked 18 years in the Bulgarian National Bank, four of them in the central bank's international department. Her partners say that she wins her clients' and colleagues' respect at first glance.She has closed a dozen of deals to attract foreign finances. In 2001 alone she attracted to the Bulgarian economy foreign financing of about USD20MN and ensured to local companies guarantees for another USD20MN. Institutions like the European Bank for Reconstruction and Development (EBRD), the European Investment Bank, Deutsche Investitions und Entwicklung Geselschaft trust her word.That is why the BANKER weekly awarded the Banker of 2001 prize to Maya Georgieva, Executive Director of First Investment Bank (FIB). The finacial institution, managed by this charming lady, is one of the most rapidly developing and most profitable banks in the counrty. Moreover, the number of its clients increases. In 2001 FIB rated among the top seven credit institutions in Bulgaria, and its balance sheet value presently amounts to BGL480MN.FIB's financial performance placed it in the group of the best Bulgarian banks throughout the year (according to the BANKER's rating). Its profit exceeded BGL11.6MN in end-September, up from BGL9.3MN a year ago. The return on its share capital was over 116%, the return on its equity - 24.3%, and on its assets - 2.5 per cent. In additinon, the bank is very actively developing crediting. The aggregate size of loans extended by FIB increased by 62.5% within the first nine months of 2001, accounting for almost half of the credit institution's assets. It rates fifth according to the amount of lent loans. By these indicators FIB remained throughout the year within the group of the banks, most actively releasing credits (according to the BANKER rating). The bank's proper management and the fianancial stability of its major shareholders - Austria's privatisation fund EPIK (holding 39% of FIB's capital) and the EBRD (holding a 20% stake) - provide sound grounds for the expansion of FIB's market positions next year.More than 700,000 Bulgarians left the country over the last ten years, discouraged by the lack of prospects. But the road to Bulgaria was walked by a man from the prosperous world. He cast in his lot with Bulgharia, and for more than ten years now he has been proving by his skills and perseverence that successful business could be made in the Balkans as well.The foreigner that we are speaking about (although the definition foreigner is hardly appropriate in this case) took part in 1991 in the establishment of the first fund for investment credits in Bulgaria, which began to finance projects in the sphere of small and medium-sized business. Five years later he headed the managerial team of the bank, which is specialized in granting credits to support Bulgarian business. Currently, the loans extended by it account for about 90% of its balance sheet value (for comparison: this ratio for the local banking sector is 35 per cent). This man is one of the initiators of the Mortgage Bonds Act. In 2001 the financial institution, managed by him, launched and marketed successfully the first issue of mortgage bonds.Frank Bauer, Chairman of the Board of Directors of Bulgarian-American Credit Bank (BACB), is the man whose efforts for the development of Bulgarian companies and financial markets have been appreciated by the BANKER weekly as worthy of the Banker of the Year prize. BACB has proved that crediting could be money-making. In end-September 2001 the bank reported BGL4.1MN in profit after paying taxes, up from BGL3.1MN a year ago. In the end of the first three quarters of this year BACB's return on share capital exceeded 32.7%, the return of its equity was about 8%, and on its assets - 3.7 per cent. The financial institution's balance sheet value rose by 26.4% - from BGL85.6MN to BGL108.2MN. The aggregate amount of credits, launched in the January 1 - September 30 period rose by 21.4% - from BGL74.6MN to BGL90.5MN. Two men brought Bulgaria back to the high orbit of international finances, from which it had dropped out twelve years ago (when BULBANK launched such an issue).The first Bulgarian Eurobond issue impressed the financiers. But this is only the beginning, which deserves to be ecouraged. Therefore, the BANKER weekly challenges the two authors of the issue - the Finance Minister Milen Velchev and his deputy Krassimir Katev. They get a police against a future prize from the BANKER - a statute to be granted at the next meeting of banks in 2002. The weekly hopes there will be sufficient proof by then that Bulgaria holds stable postions on the Eurobonds market. The police cannot be endorsed as the responisbility for the Eurobond issue cannot be endorsed either.We have to underline that by this optional award the BANKER weekly does not assess Mr. Velchev's and Mr. Katev's work as high governmental administrators, nor does it valuate the fulfillment of their obligations as ministers. They are distiguished only for the well-done work to market the Eurobond issue. Bids for its purchase exceeded 4-fold its par value of EUR250MN. Seventy five per cent of the paper was literally swallowed by the big international banks and by Westeuropean pension and investment funds. The issue allowed the top Bulgarian credit institutions, such as BULBANK, United Bulgarian Bank, DSK Bank, Bulgarian Post Bank, and their clients, to invest in a secure Bulgarian financial instrument, which would bring them good yields, instead of keeping their money at low interest in foreign banks.

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