What is your point of view about the Bulgarian banking sector?
First, I can say that the Bulgarian banking sector has gone through transformation changes since 1996 and 1997 onwards. It's related to a great extend with the application of the currency boards. The legislation has changed. The Central Bank is very tolerable to the Bulgarian banking sector. Generally speaking, from managerial, legislation and practice point of view, the Bulgarian banks are starting to operate and accept the European International approaches and criteria.
It is interesting to underline that more than 70% belong to foreign banks and many significant banks are showing interest in Bulgarian banks for the last few years.
Up to now, we can say that the international practice has been transferred to the Bulgarian banks in full and it works quiet well and effective.
In the finance sector not only the banks have to be taken into consideration. It is also the stock exchange, the bond issuing, debentures, leasing, bartering, etc. The mentions above we see as underdeveloped. This is a problem for the Bulgarian economy because the stock market lacks proper control, operation and supervision. The Bulgarian Corporate business is not applying the stock market principles.
All of the above are the basic remarks of the current banking sector up to the moment. There are problems, particularly related to the legislation, such as the credit side in the banks' operations. We will try to solve this major problem through the Bulgarian Business Association. We are looking forward to the actions of the new Parliament representatives, so that we can improve and fulfil the gaps and halls in the Bulgarian banking sector.
You have mentioned the 70% participation of foreign banks, but what is the position of the National Bank of Greece on the market?
The National Bank of Greece (NBC) is the largest in our country and around 40% of the market is financed by NBC. The bank's policy about international participation is concentrated mostly on the Balkan Peninsula. I can say that countries such as Bulgaria, Turkey, Poland, Macedonia have been of great interest for us for the past 3 years and that these countries are already seeing the positive side of our interaction. Our strategies in Skopje led us to beat and successfully acquire part of United Bulgarian Bank (UBB). The UBB, as the second largest bank in Bulgaria, is the best one to operate and have 90% of the shares.
Good deposit percentage is received in the UBB. The credit system is applying around 14%. The new technology and developments are applied and accepted very actively. At the moment, we have around 40-50% of the ATM´s in the country and 50-60% of the POS´s. Now we are working on the software of the banking system, which will ease our job and will provide better service. It will also help other foreign banks through the Internet banking. This approach is being utilized more and more by almost all Bulgarian banks.
UBB overcame the crisis in 1996 with good resistant system and actually the results were successful and satisfying. In 1997 UBB was the first bank to be privatised. The new owners were looking for assets due to the new political agreements. This was actually the reason for them to invite us and to play a major role in the UBB and in general in the Bulgarian banking sector.
This is the largest investment that NBG has made outside of Greece, or at least the largest one made by Greece in Bulgaria. The second one is the GSM operator.
One of the important developments of UBB was the acquisition with Allied Irish Bank. Our Bulgarian colleagues had the chance to be educated and share experience with employees from the Irish Bank, who came on a work visit to UBB. This allowed UBB to develop in a very rational manner.
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In international aspect, UBB has many big plans. Stopanska Banka, Skopje, in which NBG also has participation, serves some of these plans, by exchanging plans, agreeing on them and then we send out plans to our Romanian colleagues. This is just one example of how we are trying to achieve a reasonable integration.
Are you trying to expand your network?
Certainly, we have 160 branches throughout Bulgaria with 2,400 employees in the network. We operate with 250 ATM´s and we are serving around 250,000 credit cards. At the moment our assets are around 650 million Euro.
We are starting to expend out network, but much more important to us is to apply a re-education of our staff in the software packets. We also want to emphasize on the office-oriented aspect because we will use much more appliances.
Do you focus more on the corporate segment of the market?
We do have 80, 000 corporate plans and 800,000-900,000 office-oriented plans. We are very strong in corporate, but our main ambition is to develop plans for the households, new services, for people who are starting to loose jobs. We are aiming at more flexibility in our corporate plans and credits.
What is your strategy towards foreign investors?
At the moment, 22% of NBG belongs to foreign investment institution. We are a big "player" in Greece and we are interesting to foreign investors. We are trying to orientating a lot of our big plans to the European big countries, USA, Asia.
In the Bulgarian part of our business, the operating management is comprised mostly of Bulgarian staff. We admire them for adapting very easily and quickly to our standards and requirements and applying them effectively. Although, it is important to be mentioned that a lot more changes are coming, so we will see how they will handle them.
Personally, what is your role in the BIBA organization?
First, I want to say that I do not work for BIBA as much as I used to, because now I am much more concentrated on UBB.
BIBA is a very interesting organization. It has strong international activities. I view my small contribution as indication to the Governments our observations and opinions of the targets that we have. I have advised many of the last few years' changes in Bulgaria to our Greek authorities in the NBG.
We have our ideas how to improve the low investments in Bulgaria. They are very constructive for all the Bulgarian transitions in the market economy with all the institutions, which imply to uniform the preparation for negotiation with the European Union. The most important thing that we are trying to do is the publication of "white paper". Every year 70 to 80 papers are prepared, covering fields from banking, financing, taxation, to communication problems, to problems in customers' service, etc.
All these were sent to all competent bodies, to the privatization agencies, to the Ministry of Transport and to the Prime Minister. We are criticizing, with the good faith and belief for improvements.
What would be your message for our readers?
Bulgarian has a great potential. It is a very interesting country with friendly and kind people, who are well educated. Let people come to Bulgaria and they will see it for themselves. It is a country that needs to be discovered.
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