Bulgarian bank forecast 50 pct or 60 pct increases in new loans till the beginning of 2008 but their latest projections are much more modest with most of them seeing 30 pct to 40 pct growth or even 20 pct.
It seems as though banks have taken heed of the central bank’s
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order to slash lending.
At the same time, deposits are not increasing because lenders rush to give out attracted resources in new loans.
Most banks said in the very start of the year they would raise their loan interest rates by between .25 pct and 0.5 pct.
The reason is that the price of foreign funding is soaring as the market shakes under a credit crunch. In addition, household and corporate deposits do not increase quickly enough. To crown it all, banks’ re-registration is hurdled by poor administration.
DSK Bank, UBB, Piraeus Bank Bulgaria and MKB Unionbank topped Banker weekly’s ranking of the most active lenders for March 2008. The market’s 24 players are judged by loan portfolios, total assets share and annual growth. UniCredit Bulbank and Eurobank EFG are not in the table because they were born in mid-2007.
Source: Banker, P6-7
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