Summary

The market research report "Bulgaria Banking Sector Analysis" is an analytical study of the thriving banking industry of the southeastern European country, Bulgaria.  It evaluates the product quality and the services provided by the Bulgarian banking industry.  This report helps clients to dissect the leading-edge opportunities critical to the success of the banking industry in the country and detailed data supported with analysis helps investors, financial service providers, and global banking players to navigate through it.

Market Analysis

The demand for banking services has grown as confidence in the sector has gradually returned and incomes increased since 1997.  Total assets of the commercial banks rose by 45% in local-currency terms in 2005 and are estimated to have grown by around 23% in 2006.  Banks have increased their lending, particularly to households, and have shifted away from their previous pattern of holding large deposits overseas.  With the government running a budget surplus since 2003, lending to the private sector has been growing more quickly than total lending.  After these increases, loans to the non-financial sector accounted for 66% of deposits in September 2006.

The Bulgarian economy is still mainly cash-oriented, but the use of debit cards is increasing.  Credit cards are still not often used in the country, but the expansion of e-commerce and international travel is boosting the demand for this service in the country.  Moreover, the creation of a centralized credit-reporting agency in 2004 will make it easier for the banks to offer credit cards to their customers.

Key Findings

-  Bulgaria is one of the fastest growing countries in Eastern Europe by assets, loans, deposits and profitability of the sector.
-  Housing mortgage loans is one of the hottest markets for the Bulgarian banking industry and is forecasted to grow at a CAGR of nearly 88% for the period spanning from 2007 to 2010.
-  The credit card market in Bulgaria is all set to take off in a big way as it has a significant potential for expansion because only 3% of payment transactions are made by credit card.
-  Point of Sale (POS) Terminals are growing more rapidly as compared to ATMs in Bulgaria.
-  Among the deposits category, time deposits are anticipated to take lead over other kind of deposits from 2007 to 2010.

Key Issues & Facts

-  Why Bulgaria is an attractive banking market?
-  How competitive is the Bulgarian banking industry?
-  What is hottest market for bank loans?
-  What kind of deposits are set to boom?
-  What are the various opportunities and challenges for the industry?
-  What are the prospective areas of investment for the banks in near future?
-  Which factors will lead to the growth of payment cards, loans and deposits in Bulgaria?

Key Players

This section provides business overview and key financials of top players operating in the Bulgarian banking industry, including DSK Bank, Bulbank, United Bulgarian Bank (UBB), Raiffeisenbank and First Investment Bank.

Research Methodology Used

Information Sources:  Information has been sourced from books, newspapers, trade journals, and white papers, industry portals, government agencies, trade associations, monitoring industry news and developments, and through access to more than 3000 paid databases.

Analysis Method:  The analysis methods include ratio analysis, historical trend analysis, linear regression analysis using software tools, judgmental forecasting, and cause and effect analysis.

Table of Contents

Section 1    Analyst View

Section 2    Eastern European Banking Industry

2.1    By Assets
2.2    By Deposits
2.3    By Loans
2.4    By Income

Section 3    Bulgaria Banking Industry

3.1    Overview
3.2    Why Bulgaria is an Attractive Banking Market?
    3.2.1  Flourishing Real Estate Market
    3.2.2  Booming Household Credit Demands
    3.2.3  Growing Employment
    3.2.4  Rising Disposable Income
    3.2.5  Swelling Bankable Households
    3.2.6  Surging FDI
    3.2.7  EU Accession
    3.2.8  Declining Non-performing Loans
3.3    Performance
    3.3.1  By Products
        3.3.1.1  Deposits
            3.3.1.1.1  Demand Deposits
            3.3.1.1.2  Savings Deposits
            3.3.1.1.3  Time Deposits
        3.3.1.2 Loans
            3.3.1.2.1  Commercialization Loans
            3.3.1.2.2  Consumer Loans
            3.3.1.2.3  Housing Mortgage Loans
            3.3.1.2.4  Agriculture Loans
            3.3.1.2.5  Others
        3.3.1.3 Payment Cards Market
            3.3.1.3.1  Overview
            3.3.1.3.2  Leaders in the Card Market
            3.3.1.3.3  International vs Domestic Cards
            3.3.1.3.4  Credit Cards
            3.3.1.3.5  ATM/Debit Cards
    3.3.2 By Income
        3.3.2.1  Net Interest Income
        3.3.2.2  Non-interest Income
3.4    Payment Systems
    3.4.1  Real Time Gross Settlement System in Bulgaria (RINGS)
3.5    Analysis
    3.5.1  Sources of Funds
    3.5.2  Profitability Analysis
        3.5.2.1  Return on Interest Bearing Assets
        3.5.2.2  Cost of Interest Bearing Liabilities
        3.5.2.3  Net Interest Margin
    3.5.3  Ratio Analysis
        3.5.3.1  Assets/GDP
        3.5.3.2  Loans/GDP
        3.5.3.3  Loans/Assets
        3.5.3.4  Loans/Deposits
        3.5.3.5  Efficiency Ratio
    3.5.4  Opportunities
        3.5.4.1  Insurance Market
        3.5.4.2  Internet & Mobile Banking
        3.5.4.3  Consultancy & Outsourcing Market
        3.5.4.4  Card Manufacturers
        3.5.4.5  ATM & POS Terminals
        3.5.4.6  Automobile Industry
        3.5.4.7  Property Consultants
        3.5.4.8  Consumer Durables Market
    3.5.5  Challenges
        3.5.5.1  Declining Population
        3.5.5.2  Rising Classified Loans
        3.5.5.3  ATM & Credit Card Frauds
        3.5.5.4  No Co-operation between Banks involved in Card Issuing & Processing
        3.5.5.5  Merchants Acquisitions

Section 4    Future Outlook, 2007-2010

4.1    Loans
    4.1.1  Commercialization Loans
    4.1.2  Consumer Loans
    4.1.3  Housing Mortgage Loans
    4.1.4  Agriculture Loans
4.2    Deposits
    4.2.1  Demand Deposits
    4.2.2  Savings Deposits
    4.2.3  Time Deposits

Section 5    Government Regulations

Section 6    Key Players

6.1    DSK Bank
6.2    Bulbank
6.3    United Bulgarian Bank (UBB)
6.4    Raiffeisenbank
6.5    First Investment Bank

Figures

Figure 2-1: Eastern Europe - Assets of Banking Industry (in Billion US$), 2001-2006E
Figure 2-2: Eastern Europe - Deposits of Banking Industry (in Billion US$), 2001-2006E
Figure 2-3: Eastern Europe - Loans of Banking Industry (in Billion US$), 2001-2006E
Figure 2-4: Eastern Europe - Net Interest Income of Banking Industry (in Billion US$), 2001-2006E
Figure 3-1: Bulgaria - Assets of Banking Industry (in Million US$), 2001-2006
Figure 3-2: Bulgaria - Share of Commercial & Foreign Banks in Assets, Deposits & Net Loans (%), 2006
Figure 3-3: Bulgaria - Employment (in '000), 2002-2006
Figure 3-4: Bulgaria - Average Monthly Wages & Salaries (in BGN), 2002-2006
Figure 3-5: Bulgaria - Disposable Income (in Million US$), 2001-2006E
Figure 3-6: Bulgaria - Forecast for Disposable Income (in Million US$), 2007-2011
Figure 3-7: Bulgaria - Number of Bankable Households (in '000), 2001-2006E
Figure 3-8: Bulgaria - Forecast for Number of Bankable Households (in '000), 2007-2011
Figure 3-9: Bulgaria - Foreign Direct Investment in Financial Sector (in Million Euro), 2004-2006 & Q3 2007
Figure 3-10: Bulgaria - Non-performing Loans of Commercial & Foreign Banks (%), 2005 & 2006
Figure 3-11: Bulgaria - Deposits of Banking Industry (in Million BGN), 2004-2006
Figure 3-12: Bulgaria - Demand Deposits of Banking Industry (in Million BGN), 2004-2006
Figure 3-13: Bulgaria - Savings Deposits of Banking Industry (in Million BGN), 2004-2006
Figure 3-14: Bulgaria - Time Deposits of Banking Industry (in Million BGN), 2004-2006
Figure 3-15: Bulgaria - Loans of Banking Industry (in Million BGN), 2004-2006
Figure 3-16: Bulgaria - Credit Structure (%), 2006
Figure 3-17: Bulgaria - Commercial Loans of Banking Industry (in Million BGN), 2004-2006
Figure 3-18: Bulgaria - Consumer Loans of Banking Industry (in Million BGN), 2004-2006
Figure 3-19: Bulgaria - Housing Mortgage Loans of Banking Industry (in Million BGN), 2004-2006
Figure 3-20: Bulgaria - Agriculture Loans of Banking Industry (in Million BGN), 2004-2006
Figure 3-21: Bulgaria - Other Loans of Banking Industry (in Million BGN), 2004-2006
Figure 3-22: Bulgaria - Share of Top Ten Card Issuing Banks (%), 2005
Figure 3-23: Bulgaria - Net Profit of Banking Industry (in Million BGN), 2005 & 2006
Figure 3-24: Bulgaria - Net Interest Income of Banking Industry (in Million BGN), 2005 & 2006
Figure 3-25: Bulgaria - Non-interest Income of Banking Industry (in Million BGN), 2005 & 2006
Figure 3-26: Bulgaria - Processed Payments under RINGS by Time Interval (in Numbers), Jan 2006 to Dec 2006
Figure 3-27: Bulgaria - Processed Payments under RINGS by Time Interval (in Million BGN), Jan 2006 to Dec 2006
Figure 3-28: Bulgaria - Sources of Funds for Banking Industry (%), 2006
Figure 3-29: Bulgaria - Returns on Interest Bearing Assets (%), 2003-2006
Figure 3-30: Bulgaria - Cost of Interest Bearing Liabilities (%), 2003-2006
Figure 3-31: Bulgaria - Net Interest Margin of Banking Industry (%), 2003-2006
Figure 3-32: Bulgaria - Assets/GDP Ratio of Banking Industry (%), 2000-2006
Figure 3-33: Bulgaria - Loans/GDP Ratio of Banking Industry (%), 2000-2006
Figure 3-34: Bulgaria - Loans/Assets Ratio of Banking Industry (%), 2001-2006
Figure 3-35: Bulgaria - Forecast for Loans/Assets Ratio of Banking Industry (%), 2007-2011
Figure 3-36: Bulgaria - Loans/Deposits Ratio of Banking Industry (%), 2001-2006
Figure 3-37: Bulgaria - Forecast for Loans/Deposits Ratio of Banking Industry (%), 2007-2011
Figure 3-38: Bulgaria - Efficiency Ratio of Banking Industry (%), 2003-2006
Figure 3-39: Bulgaria - Forecast for Sales of TV Sets & PCs (in '000 Units), 2007-2011
Figure 3-40: Bulgaria - Population (in Million), 2001-2006E
Figure 3-41: Bulgaria - Forecast for Population (in Million), 2007-2011
Figure 3-42: Bulgaria - Share of Consumer Classified Loans in Total Classified Loans (%), Q4 2004 to Q3 2006
Figure 3-43: Bulgaria - Share of Classified Housing Mortgage Loans to Individuals in Total Classified Loans (%), Q4 2004 to Q3 2006
Figure 4-1: Bulgaria - Forecast for Commercial Loans of Banking Industry (in Million BGN), 2007-2010
Figure 4-2: Bulgaria - Forecast for Consumer Loans of Banking Industry (in Million BGN), 2007-2010
Figure 4-3: Bulgaria - Forecast for Housing Mortgage Loans of Banking Industry (in Million BGN), 2007-2010
Figure 4-4: Bulgaria - Forecast for Agriculture Loans of Banking Industry (in Million BGN), 2007-2010
Figure 4-5: Bulgaria - Forecast for Demand Deposits of Banking Industry (in Million BGN), 2007-2010
Figure 4-6: Bulgaria - Forecast for Savings Deposits of Banking Industry (in Million BGN), 2007-2010
Figure 4-7: Bulgaria - Forecast for Time Deposits of Banking Industry (in Million BGN), 2007-2010
Figure 6-1: Bulgaria - Share of Five Largest Banks (%), Mar 2007

Tables

Table 2-1: Eastern Europe - Assets of Banking Industry by Country (in Million US$), 2006E
Table 2-2: Eastern Europe - Deposits of Banking Industry by Country (in Million US$), 2006E
Table 2-3: Eastern Europe - Loans of Banking Industry by Country (in Million US$), 2006E
Table 2-4: Eastern Europe - Net Interest Income of Banking Industry by Country (in Million US$), 2006E
Table 6-1: DSK Bank - Key Financials (in Million BGN), 2004-2006
Table 6-2: Bulbank - Key Financials (in '000 BGN), 2004-2006
Table 6-3: United Bulgarian Bank - Key Financials (in '000 BGN), 2004-2006
Table 6-4: Raiffeisenbank - Key Financials (in Million Euro), 2005 & 2006
Table 6-5: First Investment Bank - Key Financials (in '000 BGN), 2006 & Sep 2007