BULGARIAN NATIONAL BANK BULGARIAN NATIONAL BANK THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCE...
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Transcript of BULGARIAN NATIONAL BANK BULGARIAN NATIONAL BANK THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCE...
BULGARIAN NATIONAL BANK
www.bnbank.org
BULGARIAN NATIONAL BANK
www.bnbank.org
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
Hilton Hotel, Sofia, Bulgaria30-31 January 2006
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
Hilton Hotel, Sofia, Bulgaria30-31 January 2006
by
Tsvetan Manchev
Deputy Governor
Bulgarian National Bank
Bulgarian Banking Towards EU
Bulgarian Banking Towards EU
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
SUMMARY
Sustainable economic development - key factor for the sound banking system;
The Bulgarian Banking Sector on the eve of the EU membership – the role of structural reforms;
Major challenges for Bulgarian Banking System on its way to membership in the Eurozone;
BULGARIAN NATIONAL BANK
www.bnbank.org
BULGARIAN NATIONAL BANK
www.bnbank.org
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
Hilton Hotel, Sofia, Bulgaria30-31 January 2006
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
Hilton Hotel, Sofia, Bulgaria30-31 January 2006
CURRENT ECONOMIC DEVELOPMENT
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
4.6%
0%
1%
2%
3%
4%
5%
6%
1998 1999 2000 2001 2002 2003 2004 2005e 2006f
Average 98 - 06
GDP REAL GROWTHGDP REAL GROWTH
Source: NSI, IMFSource: NSI, IMF
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
7.8
-1
1
3
5
7
9
11
13
15
1998 1999 2000 2001 2002 2003 2004 2005 2006f
%
Average 98 - 06
CPI
(annual average)
CPI
(annual average)
Source: NSI, IMFSource: NSI, IMF
25.125.1
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
0
5
10
15
%
Euro-zone long-term bond rates Treasury bonds (BGN)
Time deposits (BGN) Long-term credits (BGN)
INTEREST RATES CONVERGENCE
(annual average values)
INTEREST RATES CONVERGENCE
(annual average values)
Source: BNB, EurostatSource: BNB, Eurostat
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
0
100
200
300
400
500
600
700
800
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006f
in t
ho
us
an
d
0
5
10
15
20
25
%
Number of unempoyed Unemployment rate (end of period)
UEMPLOYMENT RATEUEMPLOYMENT RATE
Source: National Employment Agency, BNB
Source: National Employment Agency, BNB
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
-1.5
1.1
-1 -1 -0.8 -0.7
0
1.72.2
3
-2.0-1.5-1.0-0.50.00.51.01.52.02.53.03.5
1997 1998 1999 2000 2001 2002 2003 2004 2005e 2006f
Source: MoF, IMFSource: MoF, IMF
GENERAL GOVERNMENT BUDGET BALANCE
(% GDP)
GENERAL GOVERNMENT BUDGET BALANCE
(% GDP)
(+) surplus (-) deficit(+) surplus (-) deficit
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
83.1 86.777.1
69.9
56.248.2
40.932.4 28.6
0102030405060708090
100
1998 1999 2000 2001 2002 2003 2004 2005e 2006f
Source: MoF, IMFSource: MoF, IMF
GOVERNMENT DEBT
(% GDP)
GOVERNMENT DEBT
(% GDP)
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
MAASTRICHT CRITERIA FOR NOMINAL
CONVERGENCE
MAASTRICHT CRITERIA FOR NOMINAL
CONVERGENCE
INFLATION
0
2
4
6
8
2002 2003 2004 2005e%
Bulgaria New member states Reference value
Source: NSI, EC
LONG-TERM INTEREST RATES
012345678
2002 2003 2004 2005e
%
Bulgaria New member states Reference value
Source: BNB, ECB
BUDGET SURPLUS (+) OR DEFICIT (-)(% OF GDP)
-6
-4
-2
0
2
4
2002 2003 2004 2005e%
Bulgaria New member states Reference valueSource: NSI, MoF, EC
GOVERNMENT DEBT (% OF GDP)
010203040506070
2002 2003 2004 2005e
%
Bulgaria New member states Reference value
Source: NSI, MoF, EC
BULGARIAN NATIONAL BANK
www.bnbank.org
BULGARIAN NATIONAL BANK
www.bnbank.org
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
Hilton Hotel, Sofia, Bulgaria30-31 January 2006
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
Hilton Hotel, Sofia, Bulgaria30-31 January 2006
BANKING SECTOR REFORM
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
Local Private Banks, 23.60%
State-owned and Municipal Banks,
1.86%
Foreign Banks, 74.54%
PREDOMINANT FOREIGN CONTROL ON BANK ASSETS AND CAPITAL
(as of 30 September 2005)
PREDOMINANT FOREIGN CONTROL ON BANK ASSETS AND CAPITAL
(as of 30 September 2005)
Source: BNBSource: BNB
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
Source: BNB, FSC, BSE
Source: BNB, FSC, BSE
01020304050607080
%
Total bank assets (% GDP)Pension fund assets (% GDP)Insurance premiums (% GDP)Stock market capitalization (% GDP)
BANKS DOMINATE FINANCIAL MARKETSBANKS DOMINATE FINANCIAL MARKETS
*Preliminary data*Preliminary data
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
0
10
20
30
40
50
60
%
INCREASING COMPETITION(THE SHARE OF THE FIRST FOUR BANKS IN TOTAL BANK ASSETS AS OF THE END OF THE YEAR)
INCREASING COMPETITION(THE SHARE OF THE FIRST FOUR BANKS IN TOTAL BANK ASSETS AS OF THE END OF THE YEAR)
Source: BNBSource: BNB
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
HIGH GROWTH AND SOUND QUALITYHIGH GROWTH AND SOUND QUALITY
Bank assets are growing
very rapidly
Strongly capitalized
High liquidity is
maintained
Asset quality remains
very good
7.0
2.4
6.9
2.0
6.5
1.8
7.6
2.2
8.0
2.3
Q32004
Q42004
Q12005
Q22005
Q32005
Quality of Loan Portfolios(%)
TotalClassifieldLoans
Non-performing
Source: BNB
Growth Rates
34%
25%
33%36%
0%
5%
10%
15%20%
25%
30%
35%
40%
November 2004 - November 2005
Assets
Equity
Loans
Attracted Funds
Source: BNB
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
ROA
1.9
2
2.1
2.2
2.3
2.4
2.5
XII 2002 XII 2003 XII 2004 IX 2005
%
Source: BNB
ROE
0
5
10
15
20
25
XII 2002 XII 2003 XII 2004 IX 2005
%
Source: BNB
EFFICIENCY AND HIGH PROFITABILITY EFFICIENCY AND HIGH PROFITABILITY
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
INCREASING ROLE OF THE BANKING FOR THE REAL SECTOR FINANCINGINCREASING ROLE OF THE BANKING FOR THE REAL SECTOR FINANCING
Bank credit growth is returning to sustainable level
Banks are predominantly externally funded
Business sector credit demand is investment driven
Long term loans to business sector grow faster than short term
Business sector has a good access to lending from abroad
Residential loans to households are growing very rapidly
CREDIT GROWTH RATES
0%
20%
40%
60%
80%
1999 2000 2001 2002 2003 2004 2005*
Bus iness loans BGN
Bus iness loans FX
Loans to bus iness sector andhouseholds
Source: BNB
CREDIT TO HOUSEHOLDS GROWTH RATES
0%
50%
100%
150%
1999 2000 2001 2002 2003 2004 XI 2005
Consumer
Residential
Loans to households
Source: BNB
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
CHALLENGES FOR BANKING SECTORCHALLENGES FOR BANKING SECTOR
Smooth adoption of the EU directivesBasle II implementationSustainability of the credit growthInterest rates convergenceMergers and acquisitionsBetter corporate governance and transparency
BULGARIAN NATIONAL BANKBULGARIAN NATIONAL BANK
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
CHALLENGES FOR BNBCHALLENGES FOR BNB
Short-term challengesFine-tuning of the process of bank lending Enforcement of the new legislation related to the EU membership
–Law on Credit Institutions transposing Re-casting Directive 2000/12/EC relating to the taking up and pursuit of the business of credit institutions, Directive 2001/24/EC on credit institution reorganisation and Directive 2000/46/EC on the taking up, pursuit of and prudential supervision of the business of electronic money institutions; – Consumer Credit Law – Full transposition of Directive 2002/47/EC on financial collateral and Directive 2002/87/EC on financial conglomerates;
Medium-term challenges are linked with the full-fledged EMU membership
BULGARIAN NATIONAL BANK
www.bnbank.org
BULGARIAN NATIONAL BANK
www.bnbank.org
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
Hilton Hotel, Sofia, Bulgaria30-31 January 2006
THIRD ANNUAL INTERNATIONAL FINANCE CONFERENCEFINANCE AND BANKING MODERNISATION IN CENTRAL AND SOUTH EAST EUROPE
Hilton Hotel, Sofia, Bulgaria30-31 January 2006
Thank you for your attention!