Household deposits offset the withdrawal of funds on the part of parent banks

“The withdrawal of funds on the part of parent banks during the crisis was offset by household deposits,” said Rumen Simeonov, Deputy Governor of BNB, at the 9th "Banks, Investments, Money” international financial forum.  “We are among the 5 EU countries which have not used public funds for the financing of their banks,” reminded the expert. At present, banks, albeit at a slow rate, extend credits and we see that the economy is recovering. A rate such as the one in 2008 will hardly be seen soon but the accumulated liquidity creates conditions for the financial institutions to offer loans more urgently. According to Simeonov, the macroeconomic environment is improving but the process will be slow, compared to expectations.

The forum and Chief Economist of UniCredit Bulbank, Kristofor Pavlov, predicted an imminent reverse in the negative trends in loans - both in terms of growth and quality. "After reaching their lowest level in the middle of 2010, loans started slowly to approach normal figures," said the expert, adding that the process regarding households was driven by consumer loans, while newly-granted mortgage loans and overdraft credits lagged behind.

“We expect the demand for corporate loans to accelerate, due to the recovering of more and more sectors from the recession, and higher demand will gradually involve long-term loans as well," forecast Pavlov.

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